Marshall Public Schools receives clean audit; board approves FY25 financial report

Tamara Deitz of auditing firm Hoffman and Brookes told the Marshall Public School District board that the district received an unmodified, or "clean," opinion on its audit for the year ended June 30, 2025. She said the district's governmental funds increased by about $986,000 during the year and that the general fund (excluding transportation and operating capital) rose roughly $212,000 to just over $8 million, about 19.7% of annual expenditures, exceeding the district's 8% fund-balance goal.

Deitz explained the district entered into two right-of-use lease arrangements during the year — one for athletic space through the Board of Trustees of Minnesota State Colleges and Universities (on behalf of Southwest Minnesota State University) and another for educational space for the Marshall Alternative Learning Center via a sublease with the Southwest West Central Service Cooperative — and said combined lease-related costs measured in present value were just over $3,000,000. She also described subscription-based IT arrangements (referred to in the presentation as SABITAS) with an approximate present-value cost of $169,000 and said the district implemented GASB Statement No. 101 for compensated absences, which restated beginning governmental activities net position from just over $21,000,000 to about $16,300,000.

Deitz noted capital work during the year, including completion of a middle school theater renovation at about $657,000 (funded from the general fund) and an in-progress high school HVAC control system renovation budgeted at about $737,850, with roughly $299,000 incurred to date and completion expected in FY26. She said Marshall received about $3,000,000 in federal funding in FY25 and that federal revenue decreased about 4% from the prior year largely because COVID-related federal funding ended.

After the audit presentation, Speaker 2 moved to approve the FY25 financial audit and Speaker 3 seconded; Speaker 1 called the vote and said the motion was approved. Tamara Deitz thanked district staff for their cooperation during the audit.

Why it matters: A clean audit and a general-fund balance well above the district's policy target provide short-term financial stability, but auditors and trustees flagged several items — right-of-use leases, declining enrollment projections (a projected drop of about 98 students from FY24 to FY28), the failed $2,000,000 operating levy and the impact of reduced federal COVID funding — that affect future budgets and planning.