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External audit finds no reportable millage observations; two process-improvement recommendations offered
Summary
An RSM audit of the district's ad valorem millage program found no reportable findings for fiscal year 2025 but recommended two process-improvement opportunities — formalizing pullback/reallocation procedures and developing performance metrics — and said charter schools will be included in next year's sample.
The school board workshop heard a presentation March 31 from RSM audit staff that the firm found no reportable observations in its review of the district's ad valorem millage fund for fiscal year 2025, but recommended two process-improvement opportunities to strengthen documentation and performance measurement.
RSM's project lead, Jack Hughes, told the board the audit follows sampling and testing methodologies used in other districts and yielded "no reportable observations" while identifying "a couple places where there's opportunity to enhance the existing internal control structure," language he said appears in the report's matrix.
Why it matters: the millage fund pays for staff supplements, school safety, athletics and other district programs, and the board uses annual audits to show voters and regulators how those dollars were spent and whether procedures are defensible. The auditors told the board they verified completeness, accuracy and allowability for a 40-expenditure sample and checked monthly referendum collections.
Board members asked about the $77 million in expenditures versus $75 million in revenues; RSM staff pointed to the beginning fund balance and an ending FY25 balance of roughly $8.5 million to explain the difference. The auditors also recommended the district formalize how schools' unspent allocations are reclaimed and reallocated. "If the answer is no or there's not a clear expenditure plan for those schools, the curriculum and instruction department will take those funds, reclaim them as it were, and say, where can we put these funds to use within the district?" Hughes said.
Charter-school oversight: board counsel and the auditors said charter schools are covered under the millage ordinance and will be included in the sample next year. Counsel noted prior charter agreements that allow committee review of charter expenditures and said the district has remedies if a charter refuses to provide required documentation.
Performance metrics: RSM suggested the district consider a limited set of measurable performance metrics aligned to strategic goals to help assess the return on millage investments. The board debated whether KPIs could be defined without creating undue administrative burden; Hughes recommended starting with "low-hanging fruit, measurable performance" such as program enrollment, exit-interview data for teacher retention and other quantifiable measures.
Next steps: staff said the audit will be placed on the board's next regular meeting agenda for formal issuance and that the district and CFAC/CFOC will decide scope for future annual audits. The board also asked staff to ensure paper copies of the audit are available at meetings and to publish materials online for public review.
Quotes: "You'll note we have no reportable observations as part of this report," RSM project lead Jack Hughes said during the presentation. Board counsel added that charter agreements "specifically agreed to the committee reviewing their expenditure of those funds," and auditors said charters will be sampled next year.
What comes next: the audit will be issued formally at the next board meeting; auditors said they plan to return annually to refine scope at the board's direction.
