ROCKLAND, Maine — Regional School Unit 13 board members voiced concerns at their Wednesday night meeting over audit findings that found numerous deficiencies in financial operations in the district.
The business manager said the finance department has responded to those findings and are working to ensure they do not occur again.
The 2024-25 audit also reported a deficit of about $2.6 million in the overall budget of more than $41 million. The deficit was due largely to the district not receiving the MaineCare reimbursement it had expected to cover some of the special education costs.
Business Manager Katherine Hunt said the district had budgeted $2.2 million in revenues from MaineCare, the state’s Medicaid program, for 2024-2025 but received none.
She said RSU 13 and other Maine districts had gone to a training session by the Maine Department of Health and Human Services in February 2024. The reimbursement would have been for speech therapy, occupational therapy and physical therapy for students. DHHS and the Maine Education Department said the process would be straightforward and a way to take the burden off property taxes.
She said when the federal administration changed at the end of 2024, the process for reimbursement changed from when she had done similar reimbursement work in a prior job.
The district did not budget for any MaineCare revenue in the next year’s budget but the business manager said she expects the district will now receive revenues from MaineCare and reduce the deficit. The district has been putting in for reimbursement since February 2026.
The audit being discussed was for the 2024-2025 school year. That audit was completed in May and the board’s budget and finance committee reviewed it in July. The management letter from the auditing firm pointed out some deficiencies.
“I’m quite concerned by the number of deficiencies,” board member Brad Choyt said.
Board member Katrina Saucier said she was frustrated that the management letter from the auditor wasn’t sent to the board in a more timely manner. Hunt noted paper copies of all the materials were at the central office.
Superintendent John McDonald said all audit materials in the future will be emailed to all board members, not just members of the budget and finance committee.
The management letter from RHR Smith & Co. of Buxton, dated June 1, 2026, stated “During our audit we became aware of several matters referred to as ‘management letter comments’ that offer opportunities for strengthening internal controls and improving operating efficiencies of Regional School Unit 13.”
The deficiencies found in the audit were:
— “The general ledger accounts were not consistently reconciled throughout the year. In several instances, account balances were not supported by underlying documentation or did not agree to subsidiary ledgers or supporting schedules. Routine reconciliation procedures are a key component of an effective internal structure and are necessary to ensure the accuracy and completeness of financial information.”
— “Certain cash accounts were not reconciled in a timely or accurate manner.”
— “Investment activity was not recorded in the general ledger throughout the year.”
— “Certain budget cost center totals exceeded the School Board’s statutory transfer authority under Maine law. Pursuant to Maine statute, the regional school unit board may transfer an amount not exceeding 5% of the total appropriation for any cost center to another cost center or among other cost centers without voter approval.”
— “Failure to properly close out completed grant, special revenue, and capital project funds.”
“Student activity transactions were not consistently recorded in the accounting records during the year.”
— “Purchase orders were not consistently prepared and approved prior to the commitment of funds. In several instances, purchase orders were generated after goods or services had already been received.”
— “The general ledger inventory balance was not adjusted to agree with the detailed inventory records maintained by the Food Service Department at year end.”
The auditor also pointed out that the number of audit adjustments indicate that controls over financial reporting are not operating effectively.”
Hunt in her response told the auditor that the district takes the matters seriously and has implemented corrective actions on each of the concerns raised.
The business manager said the Maine Department of Education will be conducting a review of the district’s food service department since last year’s review did not go well. Hunt said the district had not had a state review of its food service program in nearly 10 years and the district has gone through a couple of food service managers.
Meal count procedures, components of a reimbursable meal, better inventory process and more training for staff have been undertaken. The district hired a new food service director in July who has served as a director for another district. The district and state are working closely, she said.
This story appears through a media partnership with Midcoast Villager.