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ISD 622 auditors issue clean opinion but flag six material weaknesses; board accepts audit
Summary
External auditors gave ISD 622 an unmodified (clean) opinion on FY2024 financial statements while identifying six material weaknesses in internal controls; the board accepted the audit and directed corrective-action follow-up.
Jackie Heegelt of audit firm LB Carlson told the North St. Paul–Maplewood–Oakdale ISD 622 school board on Nov. 18 that auditors issued "an unmodified or a clean opinion on that basic financial statement," while also identifying six material weaknesses in internal controls.
Heegelt and her team presented the results of the fiscal year ended June 30, 2024, saying the district missed some state and federal reporting deadlines because the audit itself was delayed. She said the audit found material weaknesses in: segregation of duties in finance; the timeliness and accuracy of reconciliations (cash, investments and payroll liabilities); material audit adjustments that were significant to the financial statements; insufficient internal controls over journal entries and supporting documentation; mismatches between board-approved budgets and amounts entered into the general ledger; and failures to meet regulatory reporting deadlines.
The audit presentation also included positive financial metrics: the district’s general fund cash balance ended the year at about $40,000,000 (an increase of roughly $8,000,000 from the prior year), and total general fund balance was about $41,400,000 (an increase of about $5,000,000). Heegelt noted the district’s unassigned fund balance stood at about $23,000,000, roughly 12.5% of expenditures — above the district’s 8–10% target.
Board members asked how the district communicates financial information to the public and what follow-up steps would be taken. District staff and the auditor pointed to regular study sessions, a Citizens Finance Committee and planned corrective action plans that must be submitted to the Minnesota Department of Education and included with the federal single-audit submission. Heegelt said auditors will follow up on the findings in the next audit cycle.
At the meeting’s action items, the board voted to accept the audit reports as presented by LB Carlson. The motion to accept the audit was moved by Anderson and seconded by Yenor and passed by voice vote.
The board’s acceptance does not change the corrective steps described by auditors; district staff said they will implement and report on corrective-action plans in subsequent reports to the board and state.
