MSAD 60 audit returns clean opinion; board authorizes up-to-5% intra-budget transfers as school lunch finding addressed

MSAD 60 auditors reported an unmodified (clean) opinion on the district’s financial statements and no material weaknesses in internal control, but the district received one compliance finding related to the school lunch program and a recommendation involving Title I documentation.

Jen Connor, partner at audit firm RTO, told the board the single-audit review of federal grants tested the child nutrition cluster and Title I. She said Title I received an “other comment” (a recommendation rather than a compliance finding) and that the school lunch program produced a significant deficiency and a compliance finding because some state reimbursement claims were overstated; auditors and staff subsequently corrected the claims and returned funds to the state, she said.

“Financial statements did receive an unmodified opinion,” Connor said, summarizing the audit’s overall result. Connor reported the district’s total fund balance fell by $750,000 from 2024 to 2025, leaving a $2.8 million fund balance and an unassigned balance of about 5.5% of the general fund budget for 2025 — within the state’s 9% allowance.

Board members pressed for clarity about a state rule that allows transfers up to 5% between budget categories. District staff explained that the transfers are calculated by category (5% of that category) and do not increase the overall budget; the mechanics require finalizing year-end transactions before actual transfer amounts are known.

Denise, representing district business staff, described how the process works: budget officers tally final expenses after June and, if categories are overspent, use the available balances in other categories (up to 5% of those categories) to cover shortfalls. The board approved a motion authorizing Denise to make intra-budget transfers for fiscal year 2026; the approval did not specify a dollar amount at the time of the vote.

Auditors also discussed budget-to-actual variances: intergovernmental revenues exceeded budget because the state education subsidy was higher than anticipated, tuition revenues were under budget by about $22,000 because of declining enrollment, and other revenues were roughly $292,000 under budget due to a timing difference in an efficiency rebate. On the expenditure side, regular instruction, special education and student-support lines were under budget largely because of unfilled positions and staff turnover, producing about $1.2 million in lower-than-budgeted expenditures for the year.

Board Chair moved the item and the motion passed. Staff said the audit report and the district’s audit booklets show revised budgets and any transfers that were implemented; they said the transfer authority is an annual, fiscal-year-limited authorization.