A US school district audit is an annual independent audit of a school district's financial statements and compliance with state and federal requirements. Every US state requires K-12 school districts to have an annual independent audit, though the specific state authority (State Controller, State Comptroller, Auditor General, Department of Education) varies. All district audits must be performed under GAGAS (Generally Accepted Government Auditing Standards), apply GASB accounting standards, and cover any federal award compliance under Uniform Guidance (2 CFR 200) where applicable.

$1,000,000 in federal awards expended during the fiscal year. The threshold was raised from $750,000 by the April 2024 revisions to the Uniform Guidance, effective for fiscal years beginning on or after October 1, 2024. For a district on a June 30 fiscal year end, fiscal year 2025 was still tested at $750,000 while fiscal year 2026 is tested at $1,000,000. It was the first increase since the threshold was set in 1997. The figure is based on federal awards expended rather than received or awarded, and it includes pass-through funding received through state education agencies, so ESSER, Title I, IDEA Part B, School Nutrition, and Head Start funds all count toward it.

The AICPA Governmental Audit Quality Center (GAQC) is a voluntary membership center for CPA firms that perform governmental audits including school district audits. GAQC membership signals that the firm has committed to specific peer review standards, continuing professional education requirements, and quality control standards for governmental audits. Most state education agencies require or strongly prefer GAQC-member CPA firms for school district engagements. In Texas, 19 TAC 109.23 explicitly requires the audit CPA firm to be a GAQC member. GreenGrowth CPAs is a GAQC member firm and is registered with the Texas State Board of Public Accountancy.

A Yellow Book audit is an audit performed under Generally Accepted Government Auditing Standards, issued by the U.S. Government Accountability Office. GAGAS layers additional independence, quality control, documentation, and continuing professional education requirements on top of AICPA GAAS. All school district audits in every US state must be conducted under GAGAS. The Yellow Book itself is officially titled "Government Auditing Standards" and is updated periodically by the GAO.

A Uniform Guidance single audit is a combined audit of financial statements and compliance with federal program requirements, performed under 2 CFR 200 Subpart F. It includes the Schedule of Expenditures of Federal Awards (SEFA), major program determination, compliance testing over the applicable compliance requirements for each major program, an opinion on compliance, reporting on internal control over compliance, a Schedule of Findings and Questioned Costs, and a Summary Schedule of Prior Audit Findings. The reporting package and Data Collection Form are submitted to the Federal Audit Clearinghouse by the earlier of 30 days after receipt of the auditor's report or nine months after fiscal year end.

All US states require K-12 audits under GAGAS with GASB accounting, but state-specific reporting layers vary significantly. California requires SACS reporting, LCFF/LCAP compliance testing, Prop 4 GANN calculation, and PERS/STRS reporting. Texas requires PEIMS, FASRG-compliant reporting, and the AFR filed with TEA. New York requires ST-3 filing with the State Comptroller. Florida requires FEFP compliance. Each state has its own audit deadline, state-specific chart of accounts framework, and state-specific compliance areas that must be tested and reported. A CPA firm auditing districts in multiple states must be competent in each state's specific framework.

ESSER (Elementary and Secondary School Emergency Relief) funds are federal COVID-19 relief funds distributed to US K-12 school districts through ESSER I (CARES Act 2020), ESSER II (CRRSA Act 2021), and ESSER III (ARP Act 2021). ESSER funds are federal awards, so any district expending $1,000,000 or more in federal awards including ESSER is subject to a Uniform Guidance single audit. ESSER-specific testing includes allowable use verification, obligation and expenditure deadline compliance, maintenance of effort requirements, and reporting to the US Department of Education. Final ESSER III liquidation deadlines have driven concentrated audit activity through 2024 to 2026.

It depends on the state. Every state has its own CPA licensing framework. Many states allow interstate practice through practice privilege provisions when a firm holds licensure in one state (mobility). Some states require the individual CPA to hold a license issued by their state board. Some states require the firm itself to register with the state board of accountancy. For school district audits specifically, states like Texas explicitly require CPA firm registration with the Texas State Board of Public Accountancy plus GAQC membership. GreenGrowth CPAs holds CPA firm registration with eight state boards of accountancy: California, Texas, New Jersey, Oregon, Michigan, Arkansas, Connecticut, and North Carolina. Before engaging any out-of-state auditor, confirm the firm holds appropriate state-specific licensing and can legally sign the audit report in your state.

Most US school districts select auditors through a formal RFP (Request for Proposals) process that occurs every 3 to 5 years. RFPs typically require: firm qualifications and peer review report, key staff resumes with government audit experience, three to five references from similar-sized districts, proposed fee structure (fixed fee, hourly, or hybrid), audit approach and timeline, and required certifications (GAQC membership, PCAOB status if applicable, state licensing). Districts often use scoring rubrics where technical qualifications weigh 60 to 70 percent and pricing weighs 30 to 40 percent. Firms that lose on price often win on qualifications and references.

Mid-cycle auditor transitions occur when districts face significant issues with their current firm: missed deadlines, quality problems, communication breakdown, or a fee increase they cannot absorb. Transitions require coordination with the prior auditor for transfer of working papers and prior year documentation, review of prior year Schedule of Findings and Questioned Costs, verification of corrective action plan implementation, and rapid onboarding to the district's fiscal calendar. We handle transitions professionally and can accelerate the workstream when there is a state deadline at risk.

School district audit fees vary based on district size (ADA/enrollment), complexity, federal award profile, state-specific reporting requirements, and prior year audit history. Small rural district audits may run $8K to $20K annually. Mid-sized suburban unified district audits typically run $20K to $60K. Large urban district audits can run $100K+, particularly when a Uniform Guidance single audit covering multiple federal programs is required. Charter school audits typically run $6K to $30K depending on school size and network complexity. Send us your district type, state, size, and federal award profile and we will scope pricing within 5 business days.