[SchoolFinance] PRIORITY NOTICE: Reminder of 2025 Annual Audit Requirements

Tue Aug 19 13:27:35 EDT 2025

Priority Notice from the Maine Department of Education
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PRIORITY NOTICE: Reminder of 2025 Annual Audit Requirements

Dear Champions of Education,

The Maine Department of Education (DOE) would like to remind you of the following requirements per statute (Maine Revised Statutes, Title 20-A, §6051<https://maine.us2.list-manage.com/track/click?u=a582edd6473e477ef6307c769&id=b13f2b791a&e=d89fcd9d0f>).

Annual audit reports are due within six months following the end of the audit period (e.g., Reports for the fiscal year ending on June 30 are due on or before December 30.). Please note the following:

  *   The auditor is required to review the audit with the school board.

  *   It is the school board's responsibility to submit the annual audit document unless it is stated in the engagement letter that the audit firm will submit the audit to the Maine DOE on behalf of the school board.

  *   Municipal school units are required to submit either a combined annual audit or a school department audit to the Maine DOE. The municipal annual report (also referred to as the town report) cannot be accepted in lieu of the complete combined annual audit.

  *   The Maine DOE must receive a Schedule of Expenditure of Federal Awards (SEFA), which includes federal award expenditures for all reporting entities, even if a single audit is not required to be conducted. The SEFA provides information needed by the Maine DOE to conduct sub-recipient monitoring, as required by the U.S. Department of Education (USED), and is due at the time of the annual audit.

  *   If a management letter is prepared by the auditor, a copy must be submitted to the Maine DOE with the annual audit, as this letter provides the Maine DOE with information needed to conduct sub-recipient monitoring, as required by USED.
Extensions
If the school administrative unit (SAU) is not able to meet the state and/or federal audit submission timeline required, an extension of time can be requested to submit the annual audit later and remain in compliance. Recent changes to the Code of Federal Regulations (2 CFR 200.512<https://maine.us2.list-manage.com/track/click?u=a582edd6473e477ef6307c769&id=38cda72308&e=d89fcd9d0f>) allow the cognizant agency to authorize an extension when the federal nine-month timeframe would place undue burden on the auditee.

Exceptions
If a municipal SAU meets all of the following eligibility criteria, the municipal SAU may submit the annual municipal audit(s) in lieu of the SAU's required annual audit:

  *   The municipal school unit does not operate a school or schools.
  *   An SAU audit is not necessary to meet federal audit requirements.
  *   The municipal SAU submits the municipal audit or audits annually.
Recent Change in State Policy
Beginning with the Fiscal Year 2025 annual audit cycle, the Maine DOE will no longer require annual municipal audits to be submitted in addition to the annual school audit. The only time a municipal audit will be required to be submitted to the Maine DOE is when a combined municipal/school department audit is conducted or when an SAU requests an exception to submit a school department audit. If an exception is granted, the Maine DOE will require the municipal audit(s) that covers the fiscal year of the school department audit exception.

Single Audit Tracking
The Maine DOE is responsible for tracking single audits for sub-recipient monitoring purposes. The Maine DOE intends to acquire municipal single audits through the Federal Audit Clearing House platform<https://maine.us2.list-manage.com/track/click?u=a582edd6473e477ef6307c769&id=ee1f2d8349&e=d89fcd9d0f> unless the municipal single audit is a combined municipal/school department audit. A combined municipal/school department audit must be submitted directly to the Maine DOE.

Recent Changes in Federal Policy
Changes to 2 CFR Part 200 are effective for awards issued on or after October 1, 2024, except for the revisions to Subpart F - audit requirements, whose effective date is for fiscal years beginning on or after October 1, 2024. Highlights of updates<https://maine.us2.list-manage.com/track/click?u=a582edd6473e477ef6307c769&id=be66db3415&e=d89fcd9d0f> to Subpart F - audit requirements include:

  *   200.501 - Increases audit threshold from $750,000 to $1 million.
  *   200.512 - Guidance added to allow cognizant agency authorization to extend nine-month timeframe.
  *   200.514 - The SEFA may be prepared in accordance with GAAP or another comprehensive basis of accounting.
  *   200.516 - If the amount of known questioned costs is unknown, a description of why the dollar amount was undetermined must be reported.
  *   200.518 - Increases Type A threshold to $1 million, while also increasing the amount of awards expended for which it applies.
Please submit all annual audit documents, reports, information requests, questions, and other audit correspondence to Michelle Alexander at DOE.Audit at Maine.gov<mailto:DOE.Audit at Maine.gov>.

Thank you.

Sent August 11, 2025
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