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Independent auditor reports clean KMAG opinion, recommends stronger journal-entry documentation
Summary
Lehi/Barney & Associates lead auditor Jessica Linsley told the Hiawatha School Board the district’s 06/30/24 financial statements received a clean opinion on the Kansas Municipal Audit and Accounting Guide (KMAG) basis, with no audit adjustments or findings; the audit includes a recommendation to retain supporting documentation for journal entries.
Jessica Linsley, lead auditor with Lehi/Barney & Associates, told the Hiawatha School Board that the district’s financial statements for the year ending June 30, 2024, received a clean opinion on the district’s KMAG (Kansas Municipal Audit and Accounting Guide) basis and that auditors found no audit adjustments, findings, material weaknesses or significant deficiencies. “It was a clean opinion,” Linsley said during the presentation.
The audit team noted that because the district reports under KMAG rather than full GAAP, the firm issues an adverse GAAP opinion as a matter of form but issues a clean opinion on the KMAG basis after the statutory waiver. Linsley explained that the adverse GAAP opinion is a required disclosure tied to the reporting framework and does not indicate an audit finding: “We first have to give an opinion on GAAP… but then below, we say, well, the reason there's an adverse opinion is because you report on this statutory basis,” she said.
Although auditors did not propose any journal-entry adjustments this year, the governance letter included one recommendation: maintain supporting documentation for journal entries and consider periodic superintendent review to provide a second set of eyes on adjustments. The report also noted an uptick in unencumbered cash tied to ESSER reimbursements and the district’s remaining long-term debt—with one bond paid off in the year and five years remaining on a 2021 issue.
Board members asked for clarification about the adverse GAAP opinion; Linsley repeated that it is an accounting-framework issue related to KMAG reporting and does not signal a material misstatement. The audit team also conducted a federal single-audit of ESSER funds, reporting a clean federal opinion with no findings for the tested ESSER activity.
Next steps: staff and the board did not record a formal vote to ‘accept’ the audit during the meeting; administrators said they would advise the board on any formal acceptance procedures if required.
