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Minnetonka board hears FY25 audit, staff reports $3.9 million amended surplus for FY26 and cautious multi‑year projections
Summary
Auditors delivered an unmodified FY25 opinion and district finance staff presented an amended FY26 general operating fund budget showing a $3.9 million surplus, driven by higher enrollment and one‑time special‑education adjustments while long‑range projections flag possible deficits if state special‑education aid is reduced.
Minnetonka Public School District officials on Nov. 20 heard a clean audit for fiscal year 2025 and a budget update that shows a $3.9 million amended surplus for FY26 but potential pressures in later years.
CliftonLarsonAllen auditors told the school board their FY25 audit opinion was unmodified, meaning auditors found sufficient support for audited transactions and no material misstatements remained uncorrected. Trey Gabler, the audit principal, said the firm identified routine accounting estimates that can be volatile—other post‑employment benefits and self‑insurance claims—and noted one corrected misstatement that increased food‑service receivables by about $179,000. ‘‘We provide reasonable, not absolute, assurance,’’ Gabler said, describing the risk‑based approach to testing.
Paul Bourgeois, the district’s executive director of finance and operations, told the board the amended FY26 general operating fund budget is about $178.4 million with net revenues exceeding expenditures by roughly $3.9 million. Bourgeois said the change reflects a net gain of about 147 students that added roughly $11.03 million to basic revenue, a $2.8 million special‑education final true‑up and contract settlement costs for labor.
Bourgeois outlined key revenue drivers: basic state formula aid, an operating referendum that provides about 15.9% of district revenue, and categorical funding such as special education. On the expenditure side, teacher salaries and benefits represent roughly two‑thirds of the budget—about $116 million—and paraprofessional pay and benefits and transportation are other large cost centers.
Looking ahead, Bourgeois presented a multi‑year projection that holds current enrollment steady at approximately 11,502 students and shows a modest surplus for FY27 but then a possible deficit driven in part by a legislatively mandated review of special‑education cross‑subsidy funding. ‘‘If the state reduces cross‑subsidy aid as currently contemplated, that would drive a roughly $1.6 million annual pressure,’’ Bourgeois said.
Auditors also summarized recent GASB (Governmental Accounting Standards Board) changes that affected the district—GASB guidance on compensated absences caused a retroactive adjustment that increased accruals for severable sick time, for example—and confirmed there were no federal single‑audit findings and no disagreements with management.
Board members asked for clarification about enrollment assumptions, transportation contract inflation and the timing for final budget adoption; staff said the final budget is typically approved in June and that updated state forecasts (including the November forecast) will provide more information for out‑year projections.
The presentation was informational; staff said the amended budget and a subset of budget items will return to the board for formal approval at the next business meeting. The district also previewed legislative priorities staff plan to press in 2026 to improve long‑term financial stability.
