A strong year-end close sets the tone for everything that follows. It creates clarity, supports accurate reporting, and positions your team for a smooth and efficient audit.

For school business teams, the goal is not just to complete the close. It is to build processes that are consistent, well-documented, and aligned with how auditors evaluate your financial position.

With a few focused practices in place, teams can approach both the close and the audit process with greater confidence and control.

Start with the Fundamentals

A clean close begins with consistent reconciliation.

At a minimum, all balance sheet accounts should be reconciled as of year-end, particularly cash accounts. These are often the first areas reviewed during an audit, and accuracy here sets the foundation for everything else.

It is also important to review prior-year interfund payables and receivables to ensure balances have been resolved. Interfund liabilities should not remain open beyond a year, and clearing these items early prevents unnecessary complications later.

Preparing Form CAT is another key step. This helps reconcile categorical revenue, accounts receivable, accounts payable, and unearned revenue, ensuring that restricted resources are accurately tracked and aligned across reporting.

Where Audits Get Complex: Interfund and Intrafund Activity

One of the most common areas of audit complexity involves interfund and intrafund activity, particularly within the general fund.

When districts operate multiple funds or sub-funds, borrowing between them can occur. From an audit perspective, what matters most is how clearly those relationships are understood and how accurately they are reported.

As emphasized during the session:

“Intrafund borrowings should always be netted off.”

This step is critical. Borrowing between sub-funds within the general fund must be netted out at the audit report level. When this is not done correctly, it can create confusion in financial reporting and lead to additional audit questions.

Taking the time to identify, reconcile, and properly reflect these balances upfront makes a significant difference. It simplifies audit preparation, improves accuracy, and reduces the likelihood of adjustments during the audit process.

What Auditors Are Looking For

At its core, the audit process is about clarity and confidence.

Auditors are looking for:

• Reconciled and supportable balances
• Alignment across financial reporting elements
• Clear documentation that explains transactions

When these elements are in place, the audit becomes more efficient and predictable, allowing teams to stay focused on their broader responsibilities.

Moving Forward

A clean close is more than a year-end task. It reflects strong systems, clear processes, and a team that understands how daily work connects to the district’s overall financial health.

The more intentional those practices become, the more efficient and manageable the audit process will be.

CASBO supports that work through targeted learning opportunities for accounting and finance professionals. Workshops, peer discussions, and School Business University (SBU) courses provide practical guidance that can be applied immediately, helping teams strengthen close processes, improve audit readiness, and build long-term confidence in their reporting.

Because when your financials are clear and well-aligned, your team is better equipped to support decisions, communicate with stakeholders, and lead with confidence.