External auditor gives district a clean opinion, flags upcoming GASB 101 change

CliftonLarsonAllen's external auditor told the Green Bay Area Public School District Board at its Feb. 10 work session that the firm issued an unmodified opinion on the district's audited financial statements for the fiscal year ended June 30, 2024.

That opinion, John Trautman, principal with CliftonLarsonAllen, said, means the financial statements "present fairly in all material respects" the district's financial position as of June 30, 2024. Trautman highlighted a large, healthy general-fund reserve and described the opinion as a "clean opinion."

Trautman told the board total governmental fund balance at June 30, 2024 was $70,241,715, with four components: nonspendable ($2,269,000), restricted ($827,000), assigned ($13,000,000) and unassigned (the reserve) of $56,144,000. He said that reserve equated to roughly 46% of expenditure levels in the reported year and that the size of that reserve is important for cash-flow timing and bond-rating considerations. "Having that fund balance and having enough reserve is extremely important," he said, adding that bond raters view fund balance as a key indicator of fiscal strength.

Trautman also reviewed the statement of revenues and expenditures, noting the net change in fund balance for the year was $1,794,000 and that the district began the year with roughly $68 million in fund balance and ended at about $70 million. He pointed school leaders and the public to the management's discussion and analysis section of the annual financial report as an accessible summary of the detailed statements.

On upcoming accounting standards, Trautman previewed GASB 101, which will change how compensated absences (sick leave, comp time, personal time) are recognized. He said the new standard will require districts to estimate amounts likely to be used rather than only recognizing liabilities when paid out. "It will increase the liability," he said, and said municipalities will face the standard first and school districts later in the coming summer cycle.

Board members asked clarifying questions about bond ratings and the mechanics of GASB 101. Trautman explained rating agencies consider fund balance among many factors and reiterated that the district's current position is fiscally strong. He said the new GASB standard will require additional estimation and record-keeping but should be less burdensome than prior liability standards (leases, subscription-based IT arrangements) because payroll and HR already track leave balances.

The audit presentation was informational; no formal action was taken.

Ending: The auditor concluded by encouraging board members and residents to review the management discussion and analysis as a concise summary of the financial statements and warned the district to prepare for the compensated-absences accounting change in the next fiscal cycle.