Good morning.

Tuesday in Whitewater will be windy with evening showers and a high of 83. Sunrise is 5:18 and sunset is 8:28, for 15 hours, 10 minutes of daytime. The moon is a waxing gibbous with 54.1 percent of its visible disk illuminated.
The Whitewater Common Council meets at 6 PM.
On this day in 1965, NASA launches Gemini 4, the first multi-day space mission by a NASA crew. Ed White, a crew member, performs the first American spacewalk.
Where does it lead a community to follow Yesteryear’s Familiar Tune, and push public issues out of public view (and so out of the public’s mind)?
It leads here: to an audit of school district finances that finds “deficiency in the District’s internal control to be a significant deficiency.”
Those who do good work don’t need to fret over “any more bad press in the community.” Those who abandon good work, over time, wind up precisely where they did not want to be. See Ryan Spoehr, ‘Significant deficiencies’ flagged in Whitewater schools financial audit, Janesville Gazette, May 29, 2025.
A video of the pertinent portion of the 5.27.25 Whitewater school board meeting appears above and the 80-page audit appears at the bottom of this post.
The audit highlights 14 significant concerns:
- Material Audit Adjustments (“we proposed a number of adjusting journal entries that were required to prevent the financial statements from being materially misstated”).
- Preparation of Financial Statements, Schedule of Expenditures of Federal Awards and Schedule of Expenditures of State Awards (“the responsibility for control over the financial statements being prepared in conformity with accounting principles generally accepted in the United States of America remains with the District’s management”).
- Employee Benefit Trust Fund (“the District did not appropriately record Fund 73 transactions, nor make the correct transfer of funds, into and out of fiduciary accounts”).
- Capital Projects Funds (“Expenditures that should have been part of the Capital Improvement Fund Plan were instead found in the Capital Expansion Fund and the General Fund, necessitating reclassification to the correct fund”).
- Excess of Expenditures Over Budgeted Amounts (“governmental fund type expenditure accounts had overdrawn their appropriations. Section 66.042(7) of the Wisconsin Statutes state that no order may be issued in excess of the funds appropriated for the purpose of which the order is drawn, unless authorized by a resolution adopted by the vote of two-thirds of the governing body”).
- Special Revenue Gift Fund Monies (“the District was unable to provide the auditors with a list of balances for each special revenue being tracked in the fund”).
- Long Outstanding Checks (“the District was carrying long outstanding checks with some dating back to 2020”).
- Fund Balance Policy (“the District has a formal fund balance policy, although the policy does not appear to include the requirements of GASB [Governmental Accounting Standards Board] 54. GASB Statement No. 54 defines the various elements of fund balance”).
- FDIC Insurance (“at June 30, 2024 the District has significant amounts of deposits in excess of the FDIC insurance limits. We did not note that the District has any form of collateral on their deposits”)
- Retention of Voided Checks (“a number of voided checks were not retained at the District”).
- Controls Over IT and Cyber-Attack Training (“we strongly recommend management investigate methods of training staff in modern cyber-attack methods to assist in preventing an attack”).
- Internal Controls over Cash Receipts (“one receipt was noted identifying two individuals who had signed off as having counted cash. However, when the cash was deposited into the bank, the deposit was for less than both individuals had counted”).
- Client Adjusting Entries (“we noted numerous instances of manual adjustments which lacked appropriate documentation or were incorrect”).
- Actuarial Studies for OPEB [Other Post-Employment Benefits] (“GASB Statement 75 requires a new valuation every two years. If there are significant changes to employee benefits accounted for under the Statement, a new actuarial study should be scheduled before the mandatory 2-year period”).
A few remarks:
Tenure. Everyone on this school board has been in office for at least a year, with many having served far longer.
Less Than 10 Minutes. This entire presentation on the audit took less than the brief ten minutes allotted on the agenda.
Late Into the Meeting. This audit was not discussed until two hours, eighteen minutes into the meeting.
Intro to the Discussion. The presenter, a district employee with a doctoral degree, begins with this introduction to the discussion: “I know this is the most exciting thing in the planet that you’ve all been looking forward to.”
Honest to goodness. A lawyer does not deprecate legal ethics with a sardonic introduction, nor a doctor with similar sarcasm before discussing the Hippocratic Oath.
About Lawyers and Opinions. One hears in the presentation that “[r]emember that an auditing firm’s job is to offer an opinion of the district. So, it’s just like a lawyer. They never say this is for sure.” As it turns out, I happen to be familiar with law, as a matter of practice and jurisprudence. This audit is not “just like a lawyer” (however vague that remark is).
This audit is not like a memorandum of law on the likelihood of prevailing in litigation. It’s an audit mainly focused on actual events and facts. What the district has done or not done, so to speak, in the words of a venerable liturgy.
What Wrong Means. The presenter contends that “I do want to remind you that this was, this came on the heels of the absence of a business manager. So, there was no one at the helm for about six months, you know, during this audit. So, a lot of the things they found are not things that the district is necessarily doing wrong.”
No, and no again: Not having someone at the helm is, in fact, doing something wrong. An outside contractor should have been hired. In any event, these many deficiencies cover more than a single vacancy period.
A Boardmember’s Concluding Remarks: “I can’t imagine [to] keep uncovering things constantly.”
Well, neither can this libertarian blogger.
Whitewater deserves better.