Watertown School Board Approves Eide Bailly for 2026 District Financial Audit

Northeast Radio SD News – Watertown, SD - The Watertown School Board on Monday approved a contract with Eide Bailly LLP to conduct the district’s annual financial audit for the fiscal year ending June 30, 2026. Business Manager Heidi Clausen presented the engagement and provided a detailed explanation of what the audit covers — and what it does not.

Clausen noted that Eide Bailly has served as the district’s auditor for several years.

“I think we’re on year five,” she said.

Audit Scope Includes Governmental and Business-Type Activities

Clausen explained that the annual audit encompasses both the district’s governmental activities and business-type activities.

Governmental funds included in the audit:

·         General Fund

·         Capital Outlay Fund

·         Special Education Fund

·         Post-Secondary Fund

·         Financial Aid Fund

Business-type activities included in the audit:

·         Nutrition Services

·         Concessions

·         Driver’s Education

·         Preschool

·         LATC Bookstore

·         Food Service

·         Educare

Component Units Are Not Part of the District’s Audit

Clausen clarified an important distinction regarding the LATC Foundation and the Arrow Education Foundation, both of which are legally separate nonprofit corporations that support the district.

Although these organizations appear as component units in the district’s financial statements, they are not audited as part of the district’s annual audit engagement.

“This does not mean that the component units operate without financial oversight,” Clausen said.

She explained that:

·         Each foundation maintains its own financial operations

·         Each receives an annual compilation of financial statements

·         Each has a finance committee that reviews budgets, revenues, and expenditures

·         Reviews occur three to five times annually in conjunction with foundation board meetings

“It is important to distinguish between the independent financial oversight provided to the component units and the annual financial audit with the school district,” Clausen said. “They are separate. However, there is oversight of those component units.”

The motion to approve the FY 2026 audit engagement with Eide Bailly was made by Kari Lohr, seconded by Jean Moulton, and passed unanimously.