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Auditors give Big Lake schools an unmodified opinion; board warned of $2.1M projected deficit
Summary
Auditors presented an unmodified opinion on the district's 2025 financial statements and noted a mid-level internal-control finding; district staff reported a fall budget revision showing a projected $2.1 million deficit driven by enrollment declines and capital spending. The board approved the auditors' report by voice vote.
The Big Lake Public School District on Nov. 12 received an unmodified audit opinion and a fall budget update that showed the district is planning to run a roughly $2.1 million deficit.
Mark, the audit presenter, told the board that "the opinion we're providing is an unmodified opinion," meaning the auditors believe the district's financial statements for the year ended June 2025 are fairly stated in all material respects. He also reported one internal-control item—"lack of segregation in accounting duties"—which he described as an inherent staffing-related risk mitigated by compensating controls. The auditors noted federal single-audit testing remains preliminary while the federal compliance supplement is pending.
District finance staff summarized the fall budget revision and enrollment update. Staff reported average ADM of 3,039 and said resident ADM increased by 22 for 2025, with total people units (PUN) served up by 24. Staff said state revenue changes (including a 2% increase in formula allowance and pension adjustment revenue) and higher investment earnings partially offset lost general education aid from enrollment declines; staff said districts also received about $300,000 in declining-enrollment aid this year. Still, staff warned the district faces sustainability issues: "what I want the board to take away from this is we're deficit spending. 2,100,000.0," and projected the unassigned fund balance at 17.8% (the district's fund-balance policy calls for 9–12%).
The presentation reviewed revenue and expenditure drivers: general fund revenues rose by just under 2% year over year (state sources and special education aid increased), federal revenues declined (timing of post-COVID funding), and expenditures increased about 13.5% driven in part by capital work including a roofing project tied to a hail insurance claim. The auditors noted a near-breakeven result on a budget-to-actual basis with a small decrease in total fund balance.
On special-revenue funds, the auditors said food-service revenues declined while expenditures increased (lower commodity reimbursements and decreased breakfast participation), producing an approximately $28,000 decrease in food-service fund balance. Community service activity and fund balance rose (presenter reported ending the year "just under 1,500,000"), but staff said the school-readiness program shows a deficit and is currently subsidized by community-education funds.
The board voted by voice vote to accept the auditors' report. The audit presentation and the fall budget revision prompted the district to flag several follow-up items: finalize federal single-audit testing when the compliance supplement is issued, monitor food-service participation and related budget revisions in early 2026, and convene finance committee meetings to begin 2027 budget planning.
Next steps: staff said they will bring an updated food-service revision in January or February after additional participation data and will schedule finance-committee meetings in early January to begin 2026–27 planning.
