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Woodland Park district warns of disclaimed audit opinion while defending Merit Academy funding practice
Summary
The district told the board auditors are likely to issue a disclaimed opinion while staff reconcile federal title reimbursements and coding; administrators said district bills are paid, there is no interfund borrowing, and Merit Academy contract language—particularly on October count timing and transportation—explains recent cash-flow practices.
Woodland Park School District RE-2 officials told the board on April 14 that the annual audit is likely to receive a disclaimed opinion while auditors and district staff finish reconciling federal title reimbursements and account coding.
"We are going to end up with a disclaimed opinion," Chief Financial Officer David said, explaining auditors could not complete a full, clean audit because some federal title reimbursements require further validation. He added the district has been reconciling the trial balance with outside accountants and expects to present audit materials to the board in late April.
The presentation was intended to calm community concern about the district’s financial health. "There’s no real crisis right now financially," David said, noting, "100% of our bills are paid out there" and that the district currently has zero interfund borrowing. He said an earlier errand loan of $2 million was repaid and the district retains access to a $3 million line of credit.
Board discussion turned to Merit Academy, the charter school that has publicly questioned whether the district is withholding funds. David read contract language (section 8.2A/8.2B) that ties district payments to when the district receives revenue and to the state-certified October count, and he cited section 5.2 that makes transportation the charter’s responsibility unless otherwise agreed in writing. "The district funds Merit when the district gets paid," he said, adding that the district will align its timing with contract terms next fiscal year.
Trustees also discussed how the district has improved federal reimbursement filings since new staff arrived, which David said accounts for an increase in federal revenue recorded in the first half of the year. He noted local revenue timing varies month to month and that a roughly $1.3 million decline in local receipts in the six-month comparison reflected timing differences, not a failure to bill.
On the audit question, David said the matters prompting a disclaimer were largely coding and classification in federal title accounts rather than large missing expenditures. He described these as "plugs" auditors use when full transactional validation is not yet complete and said the district aims to close those remaining reconciling items quickly.
The board reaffirmed plans to present a fuller audit and financial update at an upcoming meeting and to continue transparent communications to the public about reconciliations and contract interpretations.
Next steps: district staff will finalize reconciliations with the audit firm and report back to the board; the administration will also document the contract-based approach to charter payments and transportation to reduce misunderstanding.
(Outcome: board received the report; audit presentation expected at next regular meeting.)
