Winthrop auditor reports two significant control deficiencies but issues clean draft opinion for FY25

Jennifer Connors, the district's external auditor, presented the Winthrop School Department's FY25 audit to the school board and said the financial statements are in draft pending completion of the town audit and would carry an unmodified (clean) opinion.

The audit report identified two significant deficiencies in internal control. Connors said the high school activity fund lacked required approvals on a majority of tested disbursements and that some deposit forms were missing secondary verification signatures. "We selected 40 disbursements from the high school to test and 35 of those 40 disbursements did not have the approval voucher that is required," she said. The auditor also reported multiple school lunch bank reconciliations had not been signed off by the finance director, which prevents verification of review.

The auditor noted progress from the prior year: a prior material weakness related to middle school activity funds had been downgraded to a comment in this audit cycle. Connors also reported that testing of federal grants triggered by the district's grant spending included the school nutrition cluster; the school lunch program had no compliance findings.

Board members asked for clarification about the significance of the findings and whether they required corrective action. Connors said the activity-fund and reconciliation issues are actionable internal-control weaknesses that should be addressed by tighter adherence to established procedures and strengthened secondary review steps. A board member observed the high school's procedures exist but "we are not following them carefully enough," and Connors said the gaps should be relatively straightforward to fix if controls are enforced.

In accompanying financial highlights, Connors presented fund-balance movement and budget-to-actual information: the district's general fund balance decreased by $515,000 over five fiscal years but rose by about $29,000 in FY25; unassigned fund balance in FY25 was roughly $33,000 (well below the state's 9% threshold and the $1.2 million the district would have been allowed to carry based on the FY25 budget). Revenues exceeded budget by roughly $163,000 (about 1% of budget), while expenditures were under budget by about $261,000 (about 2% of budget).

The board did not take a formal vote on the audit presentation itself; Connors closed by inviting questions and the board thanked her for the report.

Ending: The board accepted the audit presentation and asked staff to work on implementing the auditor's recommended procedural improvements; the final financial statements will be issued after the town audit is complete.