Why should a school district care about CPA licensure?
Government entities, including cities and counties, are reliant on auditors
MINNEAPOLIS (Aug. 31, 2023) — As the American workforce continues to change as more baby boomers retire and birthrates continue to decline, the competition for workers across the growing choice of industries is palpable. The accounting profession is not unscathed by this trend, and the need for certified public accountants remains high because of the numerous ways their expertise is felt through our lives and organizations, including government entities, like public school districts, cities and counties.
Schools are required by law to submit their final expenditures to the Minnesota Department of Education by Nov. 30 each year and their final audit report by Dec. 31. That’s barely 100 workdays from the end of the state fiscal year on June 30 for
24 CPA firms to audit 520 public schools, charter schools, education districts and cooperatives.
Schools are also contending with a record amount of federal financial support related to the pandemic, which requires additional audit procedures. Additionally, GASB (Government Accounting Standards Board) has been publishing an astounding number of new standards that are substantially changing how districts report financial information, according to Val Mertesdorf, the director of finance for
Northfield Public Schools.
Mertesdorf, a former auditor, knows firsthand the challenges facing auditors and districts alike with more work with potentially fewer people in an annually constrained timeline.
“In the Northfield School District, our last audit was delayed due to an unexpected staffing shortage, and then further delayed because of a blizzard,” she said. “We ended up having a special board meeting to approve our audit —
only three days prior to the deadline. The year prior, we had to issue our financial statements separately from our single audit because the federal government hadn’t released the official guidance for auditing federal COVID-related funding. “
The MNCPA introduced legislation
(HF 1749 and
SF 1660) in February 2023 to consider
broadening the pathways to CPA licensure to encourage more people to work toward earning the credential. The legislation was advocated for and supported by the MNCPA board after years of discussion with members concerning the ongoing CPA pipeline concerns.
The House bill is authored by Rep. John Huot (DFL-Rosemount). The Senate bill is authored by Sen. Jordan Rasmusson (R-Fergus Falls).
“School audits require the expertise of a CPA to ensure districts are compliant. It is an invaluable partnership,” Mertesdorf said. “Now is the time to offer additional pathways for obtaining CPA licensure before we put schools at risk of being noncompliant with state law because there simply aren’t enough CPAs to do the statutorily required work.”
The proposed legislation does not eliminate the option to use 150 college credits to qualify as a CPA; the legislation provides additional pathways, including 120 college credits and two years of experience working for a CPA firm. The bills are expected to be taken up in the 2024 legislative session.
You can
read more about Mertesdorf’s concern about how the CPA pipeline is affecting Minnesota public institutions.
The MNCPA serves the public interest by advancing the highest standards of ethics and practices within the CPA profession. The MNCPA delivers on that promise by offering extensive continuing professional education and resources; advocating for members and the public with regulatory agencies and boards; and mentoring and encouraging the CPAs and business leaders of tomorrow. Founded in 1904, the MNCPA has 7,500 members who work in public accounting, business and industry, government and education.
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