University of Minnesota audit committee reports clean single-audit opinion, one reporting deficiency; FY26 audits to focus on GASB changes and compliance risks
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Summary
CliftonLarsonAllen reported an unmodified opinion on the University of Minnesota’s FY25 single audit but found one significant deficiency for a late student financial-aid report to COD. Auditors outlined FY26 audit planning and warned of implementation work for new GASB standards while internal audit noted staffing losses and slower remediation on open items.
At its February 2026 meeting, the Audit and Compliance Committee of the University of Minnesota Board of Regents heard that external auditors issued unmodified opinions on the university’s FY25 financial statements and on compliance testing for major federal programs, while identifying one significant deficiency for late reporting to the federal Common Origination and Disbursement (COD) system.
CliftonLarsonAllen principal Jean Bouchong and CLA staff told the committee the single audit tested major programs including the research and development cluster and the student financial aid cluster, and that, overall, the university remains a "low risk auditee." "We had 1 significant deficiency," a CLA presenter said, describing the issue as a late COD reporting instance in a sample of 41 student disbursements; auditors said the late report was a timing and reporting matter, not an improper disbursement of funds.
The finding involved a COD submission that was not corrected within the 15-day reporting window (or by November 30, when applicable), the auditors said, and will be addressed through management’s corrective action plan required in the single-audit report. "It is important enough to merit attention… but it's less than a material deficiency," Chair Verhaver said, noting the committee expects management follow-up.
Auditors and university officials linked the late reporting to heightened administrative burden from recent federal FAFSA and Department of Education guidance changes, which generated increased error records and resubmissions across many institutions. CLA told the committee a slight national uptick in timing-related findings has occurred as auditors continue to complete work for many schools; CLA emphasized this university’s single exception did not indicate pervasive control failures.
CLA also reported results from state-required examinations of state financial-aid spending and from NCAA agreed-upon procedures for athletics revenue and expense statements; auditors said those engagements produced no exceptions this cycle.
Looking ahead, CLA laid out the FY26 audit plan. Auditors described a risk-based approach that focuses on fraud, error and noncompliance risks, said the primary financial-statement fieldwork will occur in August–October, and noted governance will be asked for risk input in one-on-one interviews with the committee chair. CLA emphasized it will provide ‘‘reasonable assurance’’ rather than auditing every dollar and said it will immediately notify the committee if it identifies material fraud or illegal acts prior to the normal December communications.
Auditors also warned that GASB implementation will be a substantive area of management work in FY26. CLA highlighted GASB 103 as the most significant change, saying it will change the management discussion and analysis, require separate presentation of subsidies (state appropriations) to give readers more context, and alter component-unit presentations; CLA also cited GASB 87 (leases) and GASB 96 (subscription-based IT arrangements) as items that will change financial-statement presentation and footnotes.
Regents asked how those changes could affect comparisons with other states and legislative messaging. One regent warned that newly disclosed subsidies and differing foundation or land-lease resources could be used to make unfavorable comparisons; auditors and the comptroller said management discussion and analysis, plus careful presentation and peer benchmarking, can help provide appropriate context.
The committee also received an internal-audit update. Chief Auditor Goldsmith reported the internal-audit office will defer two Tier 2 audits (College of Science & Engineering IT and UMD Advising) but fewer deferrals than previously expected. Goldsmith said the office recently lost three auditors (a senior data analyst, one of two IT auditors, and an associate audit director), has posted an IT auditor position and will post a financial auditor role, and expects management to sustain attention to remediation efforts.
On remediation, internal audit reported overall remediation of high-risk items at 28% (an improvement from the prior period but below longer-term norms), that 30% of open items are past management’s expected implementation date, and that two audits have high-risk items open for more than two years: Bell Museum (inventory and valuation of its collection) and UMD Athletics (outstanding vendor-hosted application assessment tied to information security). The internal-audit office said eight audits had remediated all remaining high-risk items in this period and summarized ratings for seven completed audits: three were rated good/top-level, two adequate, and one as needs improvement (university services IT).
The Chief Auditor also disclosed two external engagements reported as information items: CLA performed agreed-upon procedures on the university’s retirement plans, and Baker Tilly Virchow Kraus provided consulting work on energy projects that may be eligible for federal renewable energy tax credits; auditors said neither posed independence issues.
The committee did not take any formal vote on these items; auditors will receive governance input as they complete FY26 planning, and management will submit required corrective action plans for the COD reporting deficiency. The meeting adjourned with no further business.
