On Wednesday, Butkovitz said he might have to include a warning in the district's annual financial report that could hamper the district's ability to borrow money and sell bonds.
"Unless the School District management can provide compelling evidence to alleviate this doubt, our Independent Auditor's Report will include an explanatory paragraph to reflect our conclusion of substantial doubt [about the district's ability] to continue as a going concern."
That report, prepared by his office, is included in the district's comprehensive financial report sent each year to bond-rating agencies and bondholders. The target date for the report is Feb. 10.
Butkovitz asked Knudsen to address a series of concerns including the "district's continued ineffectiveness in solving its growing budget gap" and its "limited authority to further cut costs" by the end of business Friday.
Knudsen's letter, which arrived several hours early, stressed that the district "is very much a going concern and the district's management and governing board are unwavering in our commitment that it remains so."
He said: "We can fully assure that the School District is in no danger of failing to meet its debt service and payroll obligations in the foreseeable future as a result of the actions we have already implemented and intend to implement."
Knudsen said he understood that Butkovitz's audit report might mention the serious financial challenges facing the district. But in light of the actions the district is taking and will take, he said, Butkovitz should not have doubts about "the School District's ability, capacity, and determination to maintain itself as a going concern."
