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Auditor gives ALBERT LEA PUBLIC SCHOOL DISTRICT a clean opinion; board approves audit
Summary
Smith Schafer issued a "clean, unmodified opinion" on the district's 2025 financial statements; the audit found no compliance or single-audit findings. The board approved the audit and heard slides showing a small general-fund drawdown, enrollment trends and revenue shifts as federal COVID-era aid tapers.
A statewide CPA firm presented the ALBERT LEA PUBLIC SCHOOL DISTRICT’s fiscal report and the school board approved the audit after a brief question-and-answer period.
"Smith Schafer issued a clean, unmodified opinion on the district's financials," auditor Riley Knutson said, summarizing the firm’s conclusion that there were no material misstatements in the financial statements and no findings in Minnesota legal compliance testing. Knutson also reported no findings in the federal single-audit of federally funded programs.
The presentation highlighted enrollment and revenue trends. Average Daily Membership fell from roughly 3,491 in 2020 to about 3,296 in the current year (a net decline of roughly 195 students since 2020), though the district saw an increase of about 29 students in 2025, primarily in grades 7–12. Total revenues for fiscal 2025 were reported at about $68.8 million, up nearly $894,000 year over year; state aid remains the largest revenue source at roughly 74% of funding. Federal aid declined to about $5.1 million in 2025 from $5.5 million the prior year as COVID-era programs phased out.
Expenditures (excluding construction and debt service) rose to about $64.9 million in 2025 from $63.2 million in 2024, an increase of approximately $1.6 million driven largely by salaries and benefits. The general fund recorded a decrease in fund balance of about $241,000 for the year; unassigned general fund balance sat around $6.76 million, or about 11.64% of expenditures — marginally below the district’s 12% policy target.
The presentation also reviewed other funds: student activities (about $229,000), food service (ending balance about $983,000 despite revenue declines), community service (a loss of roughly $40,000), debt service balances tied to a bond payoff in 2029, and about $500,000 remaining in building construction funds as of June 30, 2025. Knutson explained that some restricted and prepaid balances reflect timing and state-imposed restrictions.
Board members asked clarifying questions about which funds had deficits and whether food-service balances required spend-downs; staff said they will bring recommendations as part of a revised budget. After the discussion, the board moved to approve the audit report and voted in favor by voice vote.
The board’s approval completes the formal acceptance of the audited financial statements; staff will incorporate the results into future budget work and reporting.
