Iowa City school board accepts FY2024 audit after auditors flag material weaknesses and $38.2 million interfund balances

The Iowa City Community School District Board of Directors voted unanimously June 23 to accept the district’s FY2024 financial and compliance audit after auditors detailed material weaknesses in internal control, compliance findings on federal programs and a large set of interfund balances.

Auditor Sarah Bohnsack told the board the financial‑statement audit received an unmodified opinion, the highest form of audit opinion, but that the government‑auditing‑standards review reported material weaknesses and compliance findings. The audit’s schedules list interfund receivables and payables totaling $38,166,276 and identified deficiencies in federal program controls, student-activity accounting and timeliness of single‑audit filings.

Why it matters: the audit shows the district’s financial statements are not misstated overall but highlights weaknesses in internal control and statutory compliance that the board must track and correct. Auditors said corrective actions will be monitored across upcoming audits and expect many items to remain on the corrective plan through fiscal 2027.

“We reported an unmodified opinion on the financial statements,” auditor Sarah Bohnsack said in her presentation. She identified the audit’s material‑weakness pages and pointed directors to the corrective‑action plan in the audit binder. On federal awards she noted the district expended about $13.7 million in federal funds in 2024 and that auditors tested approximately $8.7 million.

CFO Pat Moore reviewed steps the business office is taking, including added staff members, segregation of duties, improved journal‑entry controls, use of finance software for capital assets beginning July 1, and ongoing professional development. Moore said the office is short‑staffed but is implementing a dashboard and monthly reporting to track progress on the audit’s numbered findings.

Board members asked detailed questions about the interfund balances, which auditors described as “due to/due from” items arising from timing and bank reconciliation issues and, in some cases, permanent transfers. Bohnsack said some amounts reflected prior posting errors and that long‑outstanding interfund items may require interest and repayment to the lending fund.

Votes at a glance: the board approved the meeting agenda and the consent agenda, later approved a pulled personnel agenda item (Abraham, Eastham, Horn‑Frasier and Williams voted yea; Finch and Lingo voted nay; President Malone abstained) and then unanimously accepted the FY2024 audit report. The motion to accept the audit was moved, seconded and carried with all directors voting in favor.

Next steps: the auditors will return for follow‑up auditing work in the coming cycle; district staff agreed to provide monthly updates and a tracking chart for the audit’s material‑weakness corrective actions to be included in monthly financial reporting to the board.

The board accepted the audit June 23 and held no further formal votes on remediation at the meeting.