Independent audit gives clean financial opinion but flags state compliance items, including a potential $49,000 TK ratio penalty
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
External auditors issued unmodified opinions on the district’s financial statements and federal compliance but reported state compliance findings including attendance and a Transitional Kindergarten adult‑to‑pupil ratio error that could generate a $49,000 penalty; auditors said most findings were site‑level and management is addressing them.
Crowe partner Elizabeth Saab presented the district’s external audit Tuesday, reporting an unmodified opinion on the financial statements and on federal compliance programs but a disqualified (state) compliance opinion because several state‑level compliance items were identified at school sites.
Saab told the board there were no material weaknesses or significant deficiencies in the financial statements. “We issued an unmodified opinion,” she said.
On state compliance, auditors reported several findings that are routine to other districts but must be reported. The issues included one attendance record error (no fiscal impact), one SARC (school accountability report card) data inconsistency (no fiscal impact), and short‑term independent study recordkeeping errors that created a small fiscal adjustment (auditors estimated about $700). The most substantial finding involved Transitional Kindergarten ratios at a tested site: auditors said a 0.5 adult‑to‑pupil ratio shortfall produced a calculated penalty of approximately $49,000 under the state penalty calculator. Saab said the state education agency (CDE/SEO) will review and may consider a waiver; management is already preparing documentation and corrective steps.
Board members asked about causes and corrective actions. Saab said these state compliance findings are common and often site‑level; she emphasized the difference between the financial statement audit and the state compliance audit, noting the state guide does not allow materiality thresholds and therefore must record noncompliance even when fiscal impact is small.
District management said they will work with school sites to tighten controls and indicated the district’s unaudited actuals earlier reviewed align with the audit’s financial statements.
No board vote was required on the audit presentation; auditors requested the board accept the report, which they did by consensus.