External auditors give Polk County Schools a clean financial opinion but flag Pell grant compliance and internal-control issues

Julie Fowler, a signing director with CliftonLarsonAllen, told the Polk County School Board at its April 28 work session that auditors issued an unmodified (clean) opinion on the district’s Annual Comprehensive Financial Report, the best outcome for a public-sector audit. The auditors also performed single-audit testing of federal grants and said three programs were selected for testing this year.

Fowler and other CLA staff highlighted two sets of issues. First, the auditors reported a material audit adjustment that they said reflected a weakness in internal control over financial reporting. Second, in the single-audit work the team identified multiple findings related to student financial aid (Pell grants), including timeliness and policy documentation items that triggered required reporting under the single-audit rules.

Board members pressed for details and next steps. Board member Miss Miller asked which department would oversee corrective actions for the Pell findings; Superintendent Hyde and staff said the workforce department will manage the corrective-action plan and the board received a handout outlining the specific actions. The superintendent and audit team also emphasized that the material reporting weakness sits under a broader ‘‘financial reporting’’ umbrella and that the specific items behind it have varied year to year (for example, pension deferrals and accruals in prior years).

On financial health, auditors noted that the general fund balance remains solid at the audited ratio reported (6.76 percent) after drawing down some funds that had been charged to prior COVID-era sources. That figure does not reflect subsequent intra-year changes, insurance cost increases or other projected impacts staff said will be tracked through year-end processes.

Board members asked about several cost trends called out by the audit. In response to a question about a year-over-year 45 percent increase in transportation costs, staff explained that reclassification between general administration and transportation categories by different auditors in different years accounted for much of the apparent jump and that multi‑year trends will be provided to show consistency once classifications are aligned. A typographical error in a long‑term debt number was also corrected live during the session.

Auditors said they did not encounter disagreements with management over accounting matters, resolved proposed adjustments with staff and observed no consultations with other auditors that would affect the report. They also said they must report weaknesses they observe in internal control; staff said improvements underway, including an ERP upgrade and new checklists, should reduce future findings.

Next steps noted in the work session: the district will publish the ACFR, proceed with the single‑audit follow‑ups, and the workforce department will implement and report on corrective actions related to Pell grant compliance. Staff also committed to providing the board with more granular year‑over‑year presentations and a summary of the specific internal‑control items by year so the board can track remediation progress.