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Winthrop auditor reports draft clean opinion, flags two significant control deficiencies
Summary
Auditor Jennifer Connors told the Winthrop School Board the FY25 draft financial statements would receive an unmodified (clean) opinion but that the audit identified two significant deficiencies — high school activity fund controls and school lunch bank reconciliations — and provided fund-balance context.
Auditor Jennifer Connors presented the Winthrop School Department’s fiscal-year-2025 audit, telling the board the draft financial statements would carry an unmodified opinion but cannot be issued until the town audit is complete. "They are drafted, and, those would have an unmodified opinion on them, which is a clean opinion," Connors said.
Connors said there were no material weaknesses this year, but auditors found two significant deficiencies. The first concerned the high school activity fund: in testing 40 disbursements 35 lacked the required approval voucher and several deposit forms were missing required signatures, and some deposit forms lacked a secondary count signature. The second related to school lunch bank reconciliations, where reviewers could not verify that the finance director had approved or signed multiple reconciliations, creating a segregation-of-duties concern. "Because the school department staff is so small... it's really important to have those secondary reviews and approvals in place," Connors said.
The auditor also reviewed fund-balance trends. Over the past five fiscal years the general fund balance declined by about $515,000, but Connors said FY25 showed a modest increase of roughly $29,000 compared with FY24. Unassigned fund balance in FY25 was about $303,000, roughly 2.25% of the budget, well below the state threshold of 9% and far below the $1.2 million the district could have carried forward based on the FY25 budget. Connors noted federal grant testing of the school nutrition cluster produced no compliance findings.
The presentation closed with next steps: the draft statements will be finalized after the town completes its audit and management addresses the procedures and signatures detailed in the report. Board members asked follow-up questions about remediation steps for activity-fund controls and sign-off procedures; Connors said the issues should be straightforward to correct.
The board took no formal action on the audit during the meeting; Connors’ report will be included in the final audit issuance process once the town audit is complete.
