External auditors give district a clean opinion; board warned that spending exceeded revenues

External auditors told the South Orangetown Board of Education their financial-statement audit for the fiscal year ending June 30, 2025, resulted in an unmodified (clean) opinion and no fraud or illegal acts were noted.

Melissa Zott, engagement partner, presented the audit and said: “We have issued an unmodified opinion.” She and manager Carolyn Koff reviewed the district’s general fund, other operating funds, debt service and grant activity and reported that revenues came in about $4.2 million higher than budgeted and the district recorded budgetary savings of about $1.6 million on expenditures.

Koff summarized revenue drivers: the district recorded $114.2 million in total revenues for 2025, about $1.3 million higher than the prior year. She attributed the largest revenue surplus to “use of money and property,” a $2.5 million surplus from higher interest earnings as the district moved funds into higher-yield accounts, and to a roughly $500,000 surplus in state-aid adjustments. Koff said miscellaneous refunds—primarily lower-than-expected BOCES billing—contributed about $1 million of the variance.

On expenditures, auditors reported total spending of $109.7 million, down about $500,000 from the prior year, with most savings in employee-benefit lines including Social Security, teacher retirement and health insurance. The district transferred roughly $2 million to the capital fund and $1.9 million to debt service during the year; a bond anticipation note of about $7.5 million remains outstanding to fund ongoing projects.

Koff said the district’s net change in general-fund balance was a positive swing: the board planned to use $1.17 million from reserves in its adopted budget but instead added almost $4.5 million to fund balance, ending the year with roughly $36.5 million in general-fund balance. She noted restricted reserves such as the tax-certiorari reserve and other legally restricted buckets total about $30.9 million.

During questions, a board member on the audit committee read a sentence from the report aloud and warned: “District wide expenditures exceeded district wide district wide revenues.” That board member, Robert Coleman, said the district had been using reserves to cover the gap and cautioned the Federal Reserve’s expected rate changes mean earlier interest-driven gains may not continue, creating an “unsustainable trajectory” unless the district narrows the gap between revenues and expenditures.

Auditors reported no uncorrected misstatements, no disagreements with management, and no compliance findings related to the completed audit work. A single-audit attachment for federal grant compliance is pending the federal compliance supplement; auditors said they have completed their work and will finalize the single audit when the federal document is released.

The audit presentation included a five-year fund-balance history, a summary of capital-project transfers and the status of federal grants (including child nutrition and IDEA programs) and the nearing closeout of American Rescue Plan Act (ARPA) project reporting. No formal board action was recorded on the audit at this meeting; auditors presented required communications and took questions from trustees.