RSU 18 receives clean audit opinion; single-audit finds two compliance issues in special-education grants

Jennifer Connors of RKO presented the RSU 18 fiscal year 2025 audit and said the district's financial statements received an unmodified (clean) opinion and no material weaknesses or significant deficiencies were identified. "Overall, I would say that the audit went really smoothly," Connors told the board.

The audit also included a single-audit review because the district spent more than $750,000 in federal grant funding. The auditors tested the school nutrition cluster and the special-education cluster. "For the school nutrition cluster there were no findings," Connors said. "For the special-education cluster there were two compliance findings." One finding involved allowable costs: a multi-year software purchase (a five-year license) was included in FY25 reimbursements even though portions of that expenditure were for future use and had not yet been incurred, which conflicts with federal cost-incurrence rules. The second finding concerned procurement procedures: staff had performed online suspension and debarment checks per district policy but did not retain documentation of those checks, creating a procedural compliance finding.

Connors said the audit report included one minor recommendation in addition to the two compliance items and characterized the overall audit as a "clean report." Board discussion then focused on fund-balance components and state thresholds. The presentation showed committed fund balance increased from roughly $1.2 million in FY24 to about $2.3 million in FY25, driven in part by additions to capital and emergency reserves. Unassigned fund balance was reported at $3.5 million (a decrease of about $1.4 million from FY24) and equaled 7.9% of the district's budget, about $485,000 below Maine's 9% unassigned-fund-balance threshold.

Connors also explained how certain financing transactions affected the presentation of year-to-year totals: a lease and corresponding financed purchase were shown as both proceeds and an offsetting expenditure on the financial statements, which made a single-line general-fund variance appear larger than the net change; the net decrease in the general fund was approximately $18,550. Board members asked for statutory citations and the staff said they would supply the references and footnote detail from the financial statements.

Next steps: staff said they would circulate the statutory references and the detailed footnotes in the financial statements to the board, and that management will address the two single-audit compliance items and the minor recommendation in future internal-control follow-ups.