5 ways Minnesota school districts can streamline their 2026 audits

By Justin Nilson, CPA

The end of the school year is on the horizon. Your budget preparation is ramping up. Amid these and other demands on your time, it can be hard to think about your audit. But taking small steps to prepare now can go a long way toward a more efficient, less stressful audit at year-end.

To help your school district audit go as smoothly as possible in the months to come, here are five things you can do now.

 

1. Review and reconcile the general ledger

Ideally, you’ve kept up with your month-end close, but this can be tough at certain times of the year. To ensure your general ledger is in good shape, take a minute now to check for entries that need to be completed and accounts that haven’t been adjusted.

Identify significant events such as equipment sales, property purchases, or the close-out of construction projects. Review grant funds you’ve received from the state and federal government, especially any new awards. Verify the budget that was approved by the school board, both adopted and revised, matches what was entered into your software.

Having a clean general ledger as you head into your audit can help the process flow more smoothly from the start.

 

2. Review bank accounts

Doing some housekeeping on your bank accounts now can save you from having to worry about these during your audit. At a minimum, make sure all bank statements have been reconciled and your accounts are earning adequate interest. If there have been any changes to your authorized signers, be sure to update these on each individual account.

Now is also a good opportunity, if you have multiple bank accounts, to determine whether all are needed. Paring down unnecessary accounts can significantly reduce your administrative load during your audit and throughout the year.

 

3. Improve existing spreadsheets and workpapers

Taking time to review and update these items can help you avoid recreating the wheel. Making even minor improvements can help to streamline the audit process for you and your auditors.

Start by reviewing what was used for the prior year’s spreadsheets and workpapers. Pay close attention to long-term debt and property tax schedules, along with other items you may have already received that relate to your year-end audit. Is there a way you can make these easier to follow for yourself or your auditors? Is there a better spreadsheet you could create to supply the same information more clearly and concisely?

To learn best practices for formatting spreadsheets and workpapers, consider reaching out to your auditor.

 

4. Look at what you did last year for GASB 101

The GASB 101 update has been a challenging standard for local governments to adopt. As we continue to learn more, it’s important pay close attention to what was done previously for GASB 101 to limit the burden of compiling this information for your audit. This includes reviewing all payroll policies, analyzing historical usage and estimated future years of service, and evaluating flow assumptions (e.g., FIFO vs. LIFO).

If you haven’t already, consider checking in with your auditor to determine what may need to be adjusted in preparation for the upcoming audit. Larger school districts may also want to consider reaching out to an actuary to assist in calculating your ending GASB 101 leave liability.

 

5. Reconcile student activity counts

Now is a good time to look at all student activity counts. It’s important to reconcile and monitor these throughout the year—and not just at year-end—to make sure you’re not overspending or a specific activity or fund. If there are remaining funds, these should be moved to the right place.

Even though school boards are now responsible for managing SACs, you may still be responsible for some preparation and review of these activities as the school year winds down. To better understand your compliance requirements, refer to Chapter 14 of the Minnesota Department of Education’s Uniform Financial Accounting and Reporting Standards (UFARS) Manual, which includes the Manual for Activity Fund Accounting (MAFA).

 

Look forward to your school district audit

Taking care of these details now can prevent your audit from becoming an all-consuming task later. If you’re having trouble getting started, we can help. Our auditors are happy to provide you with audit schedules or guidance for an audit preparation plan.

To learn more about how we can help your organization achieve a streamlined audit process, contact us today.