Auditors issue clean opinion for Caddo Parish schools, cite isolated control lapses and substitute-pay irregularity

External auditors from Carr, Riggs & Ingram told the Caddo Parish School Board on May 29 that they issued an unmodified (clean) opinion on the district's annual comprehensive financial statements, while noting a handful of reportable control and documentation exceptions.

Michael Gould, the engagement partner, told the board the audit was completed under an approved extension after delays to the federal compliance supplement and a subsequent government shutdown created a backlog in the quality-control review process. "We filed the report on the 31st, and so that was timely in accordance with the extension to the state and also timely with the federal government," Gould said.

Why it matters: a clean opinion signals auditors found no material misstatements in the financial statements and no material weaknesses in internal controls, but the report still includes matters the district must address to strengthen procedures and maintain public accountability.

Gould said the audit team "issued an unmodified opinion on the financial statements. That's a clean opinion. That means we're not aware of any material misstatement." He praised district finance, accounting and internal audit staff: "You have a crackerjack team here. They do great work."

The auditors identified one matter that met the state's reporting threshold for misappropriation of assets: internal audit referred instances in which certain substitute teachers received compensation for work they did not perform. "This was brought to us by internal audit by Kelly's team," Gould said; he added the dollar amounts, while noteworthy, were not material to the district's financial statements as a whole. The report includes the matter to satisfy state reporting requirements that trigger when misappropriations exceed $1,000.

In single-audit testing of federal programs, auditors selected two clusters as major programs'the child nutrition cluster and the special education cluster'and reported no instances of noncompliance or internal-control weaknesses for the programs tested. "We identify no instances of non-compliance," Gould said.

Auditors also flagged several less-severe or procedural items:

- A state-required agreed-upon procedures review found an exception where an individual's experience level reported to the state did not match the personnel file; auditors said the procedures are pass/fail checks they must report even when not operationally consequential.

- In bank-reconciliation testing, one of five reconciliations was not prepared within two months of the financial-statement closing date, and one lacked written evidence of review by a person who does not handle cash.

- A small sample showed one employee had not completed required sexual-harassment training within the 12-month period examined; the district filed the required state report but not by the Feb. 1 due date.

Financial highlights the auditors presented include an overall net deficit increase of roughly 11.7% from the prior year, while revenues exceeded expenses by about $120 million during the fiscal year. Gould said revenues decreased due primarily to lower operating grants, lower enrollment and exhaustion of remaining COVID-era funds. On the liabilities side, auditors reported a $10.9 million bond issuance during the year, a prior-period compensated-absences adjustment of about $1.4 million tied to a change in accounting guidance, and actuarial-driven declines in net pension and other-post-employment-benefit liabilities.

The engagement partner said the audit team worked to resolve outstanding questions about claims and judgments with the district; after confirmation from an internal official that there were no material changes, auditors finalized and issued the report.

Next steps: auditors offered to answer questions and the board moved on to the next agenda item, a review of the centralized bookkeeping pilot. No roll-call vote on the audit report was recorded in the transcript; auditors provided their deliverables and the report for board and management use, as required by state and federal reporting rules.