Freedom Public Schools board accepts annual audit; auditor recommends closing child nutrition fund

The Freedom Public Schools Board of Education voted to accept the district's annual financial audit during a board meeting after an on-phone presentation from the district's auditor.

Mr. Weber, the auditor from S and B CPA, told the board the financial statements were prepared on the State of Oklahoma's regulatory modified-cash basis rather than on generally accepted accounting principles. "We've presented in a regulatory bill by the state of Oklahoma, which is a modified cash," he said, adding that the presentation differs from GAAP treatment of fixed assets and depreciation.

The audit shows the district's general fund cash balance at $236,000 and a bonus-payable liability of $34,282; unassigned fund balance exists only in the general fund while other cash is restricted to the building fund or the child nutrition fund. The auditor told the board the district received about $1,200,000 in revenues for the year (including roughly $1,180,000 in the building fund and $33,000 in child nutrition receipts) and expended roughly $1,269,000, producing a decrease in fund balance of about $16,000.

Weber reviewed several other items cited in the audit working papers: lease-purchase obligations tied to past roof projects and HVAC units that, he said, will be shown as paid off and removed from future long-term-debt pages after recent final payments; employee retirement contributions of roughly $117,000 in 2024 (compared with $103,000 in 2023 and $121,000 in 2022); and federal award activity showing about $94,000 of federal funds spent. He also noted activity-account controls and balances (activity receipts of about $70,000, expenditures of about $73,000, and an ending activity balance of $35,005.13).

On internal controls, Weber said the audit produced no findings on page 26 of the report, noting explicitly there were "no findings this year to get a clean opinion" on internal-control matters. However, he cautioned the audit presentation differs from GAAP because the district uses the state's modified cash regulatory basis and does not present a depreciation schedule for fixed assets in the GAAP sense.

Weber recommended closing the child nutrition fund and transferring its remaining balances to the general fund so the district can more easily code and expend certain state and federal receipts. "Moving that money into the general fund ... gives us better [control]," he said, describing a transfer and a supplemental appropriation process that would be placed on a future board agenda and executed by district staff.

Board members who voted to accept the audit were recorded as Rhodes (yes), Philip Kirkpatrick (yes) and Robert Babcock (yes). The motion and second were not specified in the transcript. The board also approved the consent agenda earlier in the meeting with Rhodes, Kirkpatrick and Babcock recorded as voting yes.

The meeting included discussion of administrative paperwork related to the audit, including signature and notarization of auditor letters and a board-president attestation that the district provided requested materials. The record shows the auditor asked for a signed letter on district letterhead confirming the materials provided matched the district's records.

The board briefly discussed taking up the agenda items to swear in a new member, Shane Morris, but no formal action on the swearing-in was recorded in the transcript.

The auditor concluded his phone presentation and provided the board with the steps needed to finalize the report for state submission; board staff indicated they would place the recommended transfer and any necessary supplemental appropriation on a future agenda for approval.