Auditor: North Smithfield schools closed year with multimillion-dollar fund balance; no findings

Sheryl Buscher, an auditor with Bacon & Company, told the North Smithfield School Committee on March 18 that the district’s school financial statements received an unmodified opinion and that the district closed the year with a combined school department fund balance of about $2.7 million.

Buscher said the school-restricted portion of that balance included roughly $2.1 million restricted for education, about $369,000 for building and field maintenance, $56,000 for the preschool program and $25,000 for special-education courses. She said the school unrestricted fund showed a surplus of about $424,000 for the fiscal year, while school restricted funds showed a loss of about $54,000.

The auditor said the report contains a budgetary statement showing an overall budgetary surplus of $428,000 for the last fiscal year, and that the smaller school-only report mirrors the school information included in the town’s audit. She noted the town’s capital revolving fund also had a positive balance reported in the town’s report; the auditor referenced an amount of approximately $393,000 for that fund.

Why it matters: An unmodified opinion means the auditor found the district’s financial statements presented fairly under Generally Accepted Accounting Principles (GAAP). Fund-balance levels and the surplus figures affect how the district plans capital projects and manage near-term cash needs.

Committee members asked how the surplus is treated. Buscher said the surplus rolls into the district’s fund balance and, by policy and customary practice in the district, is to be used for capital projects rather than for recurring operations or salaries. She emphasized the district’s monthly budget-to-actual reports and timely audits as primary tools for preventing unexpected shortfalls.

During questions from members and a late-arriving attendee who had been at the State House, the auditor reiterated common causes of sudden deficits in other districts — late state-aid changes, unanticipated special-education tuition costs and unbudgeted capital needs — and advised continued review of monthly reports and timely completion of audits.

The committee received the audit materials and had no formal findings or management-letter items reported by Bacon & Company.

The meeting packet contains the detailed lists of restricted funds beginning on page 13 of the auditor’s report and the budgetary statement on page 11; the auditor recommended committee members review those pages for fund-level detail.