Little Falls board accepts audit showing fund shortfall, approves cost-cutting plan and nonrenewal notices for special-education staff

The Little Falls school board accepted a multi-year audit and approved a package of budget cuts and personnel notices at its March 18 meeting as district leaders warned of tightened finances.

Auditor Janelle Bitson of KDB told the board the firm issued an unmodified (clean) opinion on the district’s governmental activities and general fund but a qualified opinion on several other funds — including food service, community service, debt and capital projects — after a material bank-reconciliation adjustment could not be allocated to a specific fund. She also listed three internal-control findings: lack of segregation of accounting duties, weaknesses in the cash-reconciliation process and the need for material audit adjustments. “We did issue an unmodified or a clean opinion in relation to the governmental activities and the general fund financial statements,” Bitson said, and added the qualified opinion related to the remaining funds because of the size and unclear allocation of a reconciliation journal entry.

Superintendent Greg Johnson said the audit and recent financial trends left the district with a funding gap to address. The board had directed administration to bring recommendations to “rightsize” next year’s budget, he said, and presented a cost-containment…