Auditors issue disclaimed opinions for Woodland Park School District RE-2; board accepts FY2025 audit and orders stronger oversight

Chris Fanta, the engagement partner from Holding and Company, told the Woodland Park School District RE-2 board during a special meeting that the firm issued disclaimed audit opinions for the district's fiscal year 2025 financial statements for most funds, citing late fieldwork, unreconciled trial balances and significant internal-control weaknesses.

"It was a tougher audit this time around," Fanta said, and described a set of persistent problems: trial balances that did not balance at year end, bank reconciliations not completed in a timely manner (in some cases more than six months late), ineffective grant-accounting controls, weak segregation of duties, and numerous unsupported or incorrect journal entries. He said auditors made roughly 27 adjusting entries to plug accounts and a separate roughly $3.13 million journal entry to reconcile component-unit (charter) activity to the general ledger so beginning balances could roll forward.

The audit presentation outlined the district's financial trends: cash and investments fell by about $1 million, the general fund unassigned fund-balance days dropped from roughly 115 to 79 days (below the commonly recommended 90—120-day range), the general fund balance decreased about $1.5 million, and overall net position declined about $475,000. Revenue drivers included an estimated $1.1 million drop in sales tax and a roughly $1.1 million decline in PPR funding; state and federal grant revenue also declined year over year.

Board members asked whether the problems were historical or remediable and what actions the board should demand. Fanta recommended several governance and operational steps: require monthly bank and grant reconciliations that tie to the general ledger, hold periodic finance-committee or audit-committee meetings with auditors and finance staff, ensure finance staff receive targeted training in governmental and school finance accounting, and meet the incoming auditors early to transfer documentation and explain the district's corrective plan.

On charter accounting, Fanta said the district and the charter used different starting codes and that reconciling the charter true-up required multiple plug accounts. "We had to make a $3,130,000 entry to force that document to the general ledger," he said, adding that while the charter's books could be reconciled to bank statements, the district's internal recording did not consistently reflect the same detail.

Following the presentation and discussion, a board member moved to accept the FY2025 audit "as presented;" another board member seconded. The board approved the motion by roll call: Barkley 'yes'; Davidson 'yes'; Gilgeness 'yes'; Gordon 'yes'; Green Street 'yes'. Board members and the presenters noted that acceptance does not eliminate outstanding deliverables: the auditors will issue the single-audit package and internal-control findings separately and the board retains authority to require additional follow-up reports from management.

The board directed staff to place a finance-committee item on the upcoming agenda (noted for the next meeting) and discussed using committee-level checkpoints and key performance indicators to verify bank and grant reconciliations, beginning-balance agreements to prior audited statements, and progress against the auditor's recommendations.

The meeting adjourned after the vote. The audit and the single-audit package will be available in the auditors' final deliverables; the board said it expects to use committee-level oversight and additional reporting to monitor the district's remediation work.