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Auditors give Exeter Township School District a clean opinion but flag internal-control weaknesses
Summary
Herbine and Company reported unmodified (clean) opinions on the district's 2022–23 financial statements and federal programs, while identifying material‑weakness and significant‑deficiency findings tied largely to staff turnover and delayed reconciliations.
Herbine and Company told the Exeter Township School Board on May 6 that its auditors issued unmodified — or “clean” — opinions on both the district’s fiscal‑year 2023 financial statements and the federal programs tested.
The audit partner, Chris Tortell, said the district produced a $639,000 surplus in 2023 compared with a budgeted loss of $834,000, a roughly $1.4 million swing driven in part by unusually strong interest income and some lingering federal and state pandemic grants. He also flagged several control weaknesses tied to staff turnover in the business office and tardy reconciliations.
The nut graf: an unmodified audit opinion means the auditors found the district’s statements materially in line with U.S. generally accepted accounting principles, but the report included a material‑weakness finding and other deficiencies that administration must address under federal and state oversight.
Tortell told the board turnover in the assistant business manager and payroll clerk roles left gaps that delayed timely bank reconciliations and increased proposed audit adjustments. He said the business office has hired additional staff and switched financial software from Skyward to CSI to improve reporting timeliness and usability. The auditors also tested the Child Nutrition Cluster and Education Stabilization Fund under Uniform Guidance.
The report included these fiscal highlights for the 2022–23 year: a $639,000 operations surplus (versus a budgeted $834,000 loss); an unassigned fund balance of about $5.8 million; total reserves near $16 million; a capital‑projects ending balance of roughly $2.4 million (bond proceeds from a 2023 B bond issuance, mostly for HVAC work); and a food‑service operating surplus around $320,000 with a food‑service reserve near $1.3 million. Tortell said the district’s unassigned fund balance met its policy threshold, running about 6.83% of expenditures versus a 6% requirement.
Tortell and superintendent Christy Haller described a plan to finish the delayed 2024 audit by the end of the summer and return to a normal audit cycle for 2025. Tortell said management has provided responses to the deficiencies noted in the audit, and that those responses will be reviewed by the Pennsylvania Department of Education (PDE) and the U.S. Department of Education as appropriate.
Board members pressed for comparative context. Tortell said turnover‑related control weaknesses are common in districts that experience staff churn and that he audits multiple districts across Berks, Chester, Montgomery and Lancaster counties. He encouraged continued attention to journal‑entry support, timely federal grant reporting, and capitalization thresholds.
Administration presented next steps: continue staffing the business office, complete the 2024 audit by summer, implement corrective procedures called out in the management responses, and monitor the effect of the software change on reporting timeliness. No formal board action was taken on the audit during the meeting; the report will be part of upcoming board materials for review and follow up.
The board thanked the auditors and administration for the presentation and said it would monitor the remediation timeline.
Ending: the district’s independent auditor issued a clean opinion on 2023 while requiring the business office to sustain personnel and process changes to resolve internal‑control findings before the next audit cycle.
