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MINNEAPOLIMEDIA NEWS | Fridley Schools Face Additional State Financial Review as Overdue Audit Delays Recovery Plan
State concerns center on reliable financial records, repeated borrowing and the district’s ability to rebuild its reserves.
FRIDLEY, MN (October 27, 2026). Fridley Public Schools faces additional outside financial scrutiny as an unfinished annual audit complicates state review of its recovery plan.
The Minnesota Department of Education is hiring an outside auditor to examine the district, according to an October 20 letter obtained by the Minnesota Reformer. The publication reported October 26 that Education Commissioner Willie Jett raised concerns about financial management and repeated borrowing to repay earlier debt.
An Audit With Consequences Beyond Reporting
The district’s fiscal year 2025 audit remains unfinished, nearly 10 months after its December 31 deadline, the Reformer reported.
According to the publication’s account of the state letter, MDE cannot approve the district’s proposed financial recovery plan without dependable financial information. State officials also questioned whether the proposal demonstrates a realistic commitment to eliminating statutory operating debt.
Fridley’s own public financial FAQ says it has no confirmed audit completion date. The district says auditors control the timetable and that staff are supplying requested records and cooperating with the review.
The district also says the completed audit will be released publicly and presented at an open Board of Education meeting.
Understanding the Financial Designation
An MDE report to the Legislature lists Fridley among districts in statutory operating debt for fiscal year 2025. The report records a negative unreserved general fund balance of approximately $8.31 million and indicates that a final audit had not been received.
Those figures require that qualification: they are part of the state’s reported financial picture, not a substitute for the missing completed audit.
Minnesota law requires a special operating plan when the relevant negative general fund balance exceeds 2.5 percent of annual expenditures. The plan must explain how deficit spending will be reduced and receive state approval.
The law permits aid payments while approval is pending, but provides for withholding specified aid if a district’s plan is disapproved.
Borrowing and the District’s Response
The Reformer reported that Fridley borrowed $11.5 million in January, followed by $23.4 million in September to repay earlier borrowing and support current cash flow. Superintendent Brenda Lewis told the publication the district recognizes the seriousness of its challenges and welcomes a thorough review.
In its public explanation, the district describes aid-anticipation borrowing as a way to cover operations and payroll when payment obligations and incoming revenue do not align.
A June response to MDE also outlined work on cash-flow forecasting, vendor payments and budget projections. The district said audited results would inform revisions to its recovery plan and possible budget amendments.
Families and taxpayers can follow those records through the district’s financial questions and answers page. The completed audit and a state-approved recovery plan remain central documents for assessing the district’s financial direction.
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