Auditors give Holmdel clean opinion; board presents 15-year data as transportation costs and reserves draw attention

An external audit team gave the Holmdel Township School District an unmodified, or "clean," opinion on its 2023–24 financial statements and single-audit review of major grant programs, and district leaders used a newly compiled 15-year data set to show why the board expects a budget shortfall in the coming year.

The auditors, Chris Bodecker, audit manager, and Brian Waldron, partner on the engagement, told the board they issued an unmodified opinion on the financial statements and an unmodified opinion on the single-audit work covering the district's selected state and federal programs. "We have an unmodified opinion," Bodecker said during his presentation.

The audit presentation also included a recapitulation of fund balance that the auditors said drives budget planning: a total fund balance of about $4,300,000, with approximately $1,600,000 in the capital reserve, $300,000 in maintenance reserve, $143,000 in an unemployment reserve, assigned amounts of $850,000 used in the 2024–25 budget, encumbrances near $906,000 and an unassigned fund balance of about $564,000. Bodecker noted there were no audit findings requiring corrective action.

District leaders said the reserves have been drawn down in recent years. "The maintenance reserve used to be a heck of a lot bigger," a board member said during the meeting, noting the board and administration had used reserve balances in previous budgets.

Superintendent Dr. Cascone and Vice President Kim Lopresti walked the board and community through a 15-year compilation of staffing, salary, proficiency and other indicators intended to provide context for the coming budget process. Dr. Cascone said staffing rose sharply during pandemic years and has declined since, with recent reductions accomplished "largely through attrition." He emphasized the district's goal of minimizing job losses when possible.

The presentation included academic and staffing context: Holmdel's reported student-to-teacher ratio of about 10:1 compared with a county median of 9.6:1, and the superintendent noted the district outperformed its county cohort on state assessments by roughly 24 percentage points in math proficiency and 17 percentage points in English/language arts on recent statewide measures.

Board members and administrators also highlighted transportation as a principal budget driver. During public comment and later Q&A, residents and staff said district transportation expense has risen to roughly $5 million in recent years. In response to questions about why costs jumped, district staff explained how the market for school bus service has changed: annual vendor bidding or renewal cycles, a tighter pool of local contractors, new training/certification expectations for drivers and a national driver shortage all put upward pressure on contract prices.

A district staff member who handled transportation procurement explained that district contracts may be renewed annually at a state-allowed percentage (CPI) or put out to bid; renewing at the CPI can sometimes be less costly than a new competitive bid. The board also discussed how changes in start times several years ago reduced transportation costs by an estimated $700,000.

Board members stressed that while the district is forecast to open the next budget cycle with a deficit driven by constrained local levy growth and rising benefit and transportation costs, the board and administration are using the 15-year data set and other analyses to identify options and to explain the district's position to the community. Dr. Cascone told the board he expected follow-up materials and community communications as the budget process continues, and that state aid numbers—an important variable—were imminent.

Why this matters: the audit confirms the district's reported financial position, but leaders said the combination of drawn-down reserves, rising transportation expenses and limited local revenue flexibility will force difficult budget choices for 2026–27 unless state aid or other revenue changes materialize.

The board said it will continue sharing the 15-year data publicly and pursue collaborative conversations with township officials about potential supports.