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RSU 18 audit finds clean opinion but flags two federal grant compliance issues
Summary
Auditor Jennifer Connor told the RSU 18 board that the FY25 financial statements received an unmodified (clean) opinion, but the single-audit of federal grants identified two compliance findings in the special education cluster related to allowable costs and undocumented suspension/debarment checks.
Jennifer Connor, the auditor from RKO, told the RSU 18 school board the district's fiscal year 2025 financial statements received an "unmodified opinion," meaning the auditor issued a clean report on the statements.
The clean opinion was paired with testing required by government auditing standards. Connor said the auditors found no material weaknesses or significant deficiencies in internal control but issued one routine recommendation. Because RSU 18 spends more than $750,000 in federal awards, the audit included a single-audit of federal programs. The school nutrition cluster had no findings, Connor said, but the special education cluster produced two compliance findings.
The first finding related to allowable costs: the district included a five-year software purchase in FY25 reimbursements even though a portion of that cost covered future periods and should not have been reimbursed until incurred. "Some of that cost was for future use of the software, it wasn't technically allowable," Connor said. The second finding concerned procurement requirements: while the district has a policy of checking the federal suspension and debarment list online, auditors reported staff performed the check but did not document the verification, which the guidance requires.
Board members pressed for detail about how fund-balance categories moved during the year. Connor said committed fund balance rose substantially, in part because the board moved an emergency contingency amount into committed reserves; unassigned fund balance was $3.5 million for FY25, a decline from FY24, and equated to 7.9% of the budget. Connor noted that level is under the state's 9% threshold.
The audit report and single-audit report will be posted with the meeting packet and made available online, Connor said. Board members asked for the statutory references cited during the discussion and clarification on how leases and finance purchases are presented in the financial statements; Connor walked through those presentation details and noted the net general fund decrease of about $18,550 when financing offsets are included.
The board did not take formal action on the audit during the meeting; the report will be part of the public packet and posted online for review.
