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Milwaukee board accepts FY2025 audit; auditors report clean opinion but cite control weaknesses and DPI-designated deficit
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Summary
External auditors gave Milwaukee Public Schools an unmodified ("clean") opinion on FY2025 financial statements but identified material‑weakness categories and recommended improvements; the board voted to accept the audit as administration works to close a $46 million DPI‑reported deficit.
The Milwaukee Board of School Directors voted to accept the Milwaukee Public Schools FY2025 audit after CliftonLarsonAllen (CLA) delivered an unmodified opinion but highlighted material‑weakness categories and control recommendations.
CLA principal Jake Linnell told the board the audit resulted in a "clean opinion," meaning the financial statements were free of material misstatement. He said the audit focused on significant account balances, transaction classes and estimates and that the district had sped up its reporting timeline by issuing the statements eight months earlier than in the previous year. "Our opinion that's included within the financial statements is an unmodified opinion or what's commonly referred to as a clean opinion," Linnell said.
The auditors nonetheless identified two categories that rose to the level of material weakness related to the district's year‑end closing and timely reporting processes. CLA also recommended improvements in system user‑access controls and in timely reconciliations of select balance‑sheet accounts. Linnell said management included responses and a detailed corrective‑action plan with the reports.
Superintendent Brenda Cassellius and CFO Aitche Sava told the board the administration is acting on CLA's recommendations. Cassellius described work to strengthen reporting, implement a new business manual and improve grant claiming. CFO Sava said the district had completed three audits in the past 13 months and is now "caught up," which will allow more proactive planning for FY2026 auditing and reporting.
Board members pressed for clarity on a $46 million deficit figure the administration had cited. CLA explained the discrepancy between that DPI‑reported deficit and the general‑fund presentation on GAAP financial statements. "There are some differences in reporting in the GAAP financial statements versus the information that gets reported to DPI for regulatory purposes," Linnell said, noting differing fund aggregates and revenue‑recognition rules for DPI versus GAAP reporting.
Administration also reported steps to improve Medicaid and special‑education reimbursement processes, including allocating positions to recapture high‑cost special‑ed funds and revising billing methodologies. Cassellius said the district is working with third‑party vendors to maximize eligible reimbursements and that changes had already been implemented during the audit process.
Vice President Herndon moved to accept the audit reports as attached; Director Reza seconded. On a roll‑call vote the motion passed with eight ayes. The board said it would monitor corrective actions through the audit‑advisory and accountability committees and carry follow‑up on remediation into the coming fiscal cycle.
The administration plans public budget posting on May 4, a budget presentation to the board on May 7, and a public hearing on May 12 ahead of a recommendation to the board on May 28.
