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Pelican Rapids schools receive clean audit; auditors note routine findings and GASB 101 effects
Summary
Auditors presented a draft 2024–25 audit showing an unmodified (clean) opinion. The board heard five common control findings, a preliminary federal single-audit note and a general‑fund decrease leaving an ending balance just over $3 million; the board voted to accept the audit.
Courtney Richmond of the audit team told the Pelican Rapids Public Schools board that the district received an unmodified (clean) audit opinion for fiscal year 2025. "The district received a clean audit opinion for fiscal year 25," Richmond said during the presentation.
The presentation, described to the board as preliminary for federal compliance, noted the district spent just over $822,000 in federal awards this fiscal year and that final federal testing awaits the Office of Management and Budget's 2025 compliance supplement. Richmond cautioned the board that the federal portion remains tentative until that supplement is released.
The auditors identified five recurring findings in the financial‑statement testing: preparation of certain financial statements and the schedule of expenditures of federal awards; material journal entries proposed during audit adjustments; limited segregation of duties consistent with a small finance office; missing supporting time cards for some hourly employees; and two instances where credit‑card receipt documentation was not retained. Richmond described several of these as common for smaller districts.
On fund balance, the auditors' slides showed the district's general fund decreased by about $239,000 during fiscal 2025, leaving an ending general fund balance of just over $3 million. Richmond said that ending balance helps with reserves and could support favorable bond ratings if the district issues debt in the future.
The presentation also summarized implementation of GASB Statement 101 related to compensated absences, noting that the new standard required additional governmental‑wide liabilities to be recorded for leave balances as of the June 30, 2025 audit date.
District finance staff answered board questions about specific findings. In a discussion over student activity accounts flagged as inactive under Minnesota rules, a district representative said the district had asked auditors to consider advisor‑transition circumstances before requiring retirement of dormant accounts: "We're not gonna take that money and then disperse it against all of them because Tara already communicated with me that she wants to order magazines this year for the VPK program," the representative said, explaining the district's rationale for retaining some dormant balances.
Board action: the board moved and voted to accept the 2024–25 audit as presented; the single (federal) audit remains pending until OMB releases the compliance supplement and will be completed afterward.
What happens next: staff said they expect to resume federal audit testing after the compliance supplement is issued and to implement corrective steps for the findings already identified.
