District audit returns clean opinion; auditor flags small, disallowed stock holding

Wendy Unger, a CPA at Baker Tilly, told the School District of Janesville’s Finance, Buildings and Grounds Committee that the firm issued an unmodified, or "clean," opinion on the district’s financial statements for the year ended June 30, 2025. "We have issued a clean unmodified opinion," Unger said, describing the opinion as "the highest level of assurance" and noting there were no material audit adjustments.

Unger reviewed the audit package and the firm’s separate ‘‘reporting and insights’’ document. She said the firm found no internal control material weaknesses and no compliance findings in the federal programs sampled — the special education cluster, the Medicaid cluster and Title I — or in the state general aids review. "There were no compliance findings that were noted," Unger said.

The auditor flagged one compliance reminder: the district still owns a small amount of corporate stock, which she said is disallowed under state statute and should be researched and liquidated. "Under state statute, the district is not allowed to own stock," Unger said, and she recommended management investigate how to remove that holding from the books.

Unger summarized key financial results: the district’s general fund added $918,000 to end the year with roughly $27.2 million in fund balance, roughly 18% of operating budget and within board policy. She also described material line‑item variances: actual revenues were about $1.8 million over budget (noting investment income, property sales and state revenue as contributors), while total expenses were approximately $854,000 over the adopted budget. The special education fund reported $25.2 million of expense and revenue and showed a zero fund balance as required by DPI rules.

Committee members asked about using a local Baker Tilly office; Unger said the firm’s governmental public‑sector work is handled out of its Milwaukee and Eau Claire offices. On retiree health liabilities, Unger noted a net post‑employment benefit liability of about $17.4 million as of 6/30/2025 after a $10 million trust set‑aside.

The committee accepted the audit presentation and moved the auditor’s report forward as part of the financial materials to the full board for approval. Next procedural steps include management researching the stock holding and continuing the district’s fiscal monitoring and trustee conversations about OPEB funding.