Tamara Deitz of audit firm Hoffman and Brookes told the Marshall Public School District board the district's financial statements for the year ended June 30, 2025, received an unmodified (clean) opinion and the board moved to approve the audit.

The audit presentation, which the board approved at the meeting, showed governmental funds increased by about $986,000, bringing combined fund balances to roughly $15.1 million. Deitz said the general fund (excluding transportation and operating capital) rose about $212,000 to just over $8.0 million, representing about 19.7% of annual district expenditures and exceeding the district's stated minimum fund balance goal of 8%.

Deitz highlighted several items that shaped the year's finances: completion of a middle school theater renovation costing about $657,000 funded from the long-term facility maintenance budget; two right-of-use lease arrangements with a present-value obligation just over $3.0 million (one for athletic space involving Southwest Minnesota State University and one for educational space via a sublease with the Southwest West Central Service Cooperative); and subscription-based information-technology arrangements (SABITAS) with a present-value cost near $169,000. She said these leases and subscription arrangements require booking assets and liabilities on government-wide statements while being shown as in-and-out items on fund statements.

The audit also reflected an accounting change: implementation of GASB Statement No. 101 for compensated absences required recognizing PTO and other leave that rolls over as a government-wide liability. Deitz said that led to a restatement of beginning net position from just over $21.0 million to $16.3 million, a decrease of about $4.8 million.

Deitz noted federal revenue for the district was about $3.0 million in FY25 and declined roughly 4% (approximately $1.3 million) from FY24 as COVID-related funding ended. She said that change reduces certain federal compliance balances but the district remains subject to single-audit thresholds; Deitz added the single-audit portion will be issued separately because the Office of Management and Budget delayed its single-audit compliance guide.

Other highlights Deitz presented included a budgeted high-school HVAC-control renovation of about $737,850 with $299,000 incurred to date, community service and food-service fund results (the food-service fund posted about $2.4 million in revenue, $2.25 million in expenditures and a fund balance near $1,152,000; the community service fund ended near $951,123), and a debt service fund balance of about $3,432,000. Deitz also reported the health insurance internal-service fund incurred more in claims and fees than it received (about $3.86 million in charges versus $4.97 million in costs), producing a negative net position of roughly $2.0 million.

Deitz called attention to the district's enrollment projections, which show a projected decline of about 98 students from FY24 to FY28 with the largest near-term drop expected in early childhood through first grade. "Enrollment is what determines most of the school district's funding components," she said, urging that maintaining enrollment stability remain a priority.

The board approved the audit after a motion recorded in the transcript as made by Sarah Runtje and seconded by Jeff; the chair called the vote and announced the motion carried. Deitz thanked district staff for their assistance in completing the audit.