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Auditor reports clean opinion; district closes fiscal year with smaller than projected deficit
Summary
Independent auditors gave the district an unmodified (clean) opinion on financial statements and reported no material weaknesses for federal programs. The business office said the district ended the year with a roughly $2.9 million reduction to fund balance (better than a larger projected loss) and outlined factors that improved the result and the
Independent auditors from Yo and Yo presented the annual audit and issued unmodified (clean) opinions on the district’s financial statements and on federal awards included in the single audit. The audit report showed no material weaknesses, no significant deficiencies, and no material noncompliance in the financial statements or in audited federal programs (the IDEA special‑education cluster was the district’s major federal program for single‑audit purposes).
Auditor Jennifer Watkins told the board the district’s food‑service fund has an “excess net cash resources” finding that requires a spend‑down plan with the Michigan Department of Education; the food‑service fund balance increased slightly to about $3.6 million and the state allows only three months of expenditures to be held as unrestricted fund balance in that fund.
Cathy (business office) and finance staff summarized the budget position. The district closed the year with a general‑fund fund balance of roughly $16.0 million (about 10.8% of operating expenditures on the modified‑accrual basis). That result was better than the worst projections earlier in the year: the district had previously modeled a larger loss (approximately $6.9 million), and business‑office adjustments and unspent building budgets helped reduce the actual loss to about $2.9 million for the year. District staff credited three main improvements: receipt of previously pending federal/state revenue, higher-than-expected interest and other local revenues, and unspent building/department budgets.
The business office warned that the district must still plan for the coming fiscal year. The state budget approved an increase in the foundation allowance (per‑pupil) that will help revenue, but other state adjustments and the district’s pension/OPEB accounting continue to affect longer‑term net position on the full‑accrual statements. Staff also noted headcount declines (approximately 220 students fewer than the prior count; the district had budgeted a 150‑student decline), which will reduce future revenue until October count and state aid finalization are complete.
Board members praised the finance team and staff for management that reduced the projected deficit; administrators said additional state aid and the planned budget amendment (to be presented in February/March) will clarify the 2025‑26 outlook. The auditors and business office said they will present a more detailed PowerPoint in a forthcoming board meeting for community review.
