Norwin School District audit issues unmodified opinion; general fund fell about $3 million in 2023-24

Mark Turney, the auditor who presented Norwin School District’s 2023-24 financial audit at the board’s Feb. 17 meeting, said the independent auditor’s report included an "unmodified opinion," meaning the financial statements conform to professional standards.

That opinion, Turney said, accompanies a year-end general fund balance of about $8,698,000 — roughly $8.7 million — a decline of about $3 million from the prior year. Turney told the board the district’s actual decline was smaller than what the district had budgeted; the board had projected using about $4.38 million of fund balance but used a bit more than $3 million.

The auditor said the district’s unassigned fund-balance portion was 8.4% as of June 30, 2024. Turney noted that Pennsylvania law and common practice focus on the unassigned portion when assessing a district’s fiscal cushion and that the state’s threshold referenced in the presentation was 8%.

Turney also reviewed other components of the district’s financial statements. He said assigned reserves and nonspendable amounts (prepaid expenditures such as health insurance) account for the remainder of the general fund balance and summarized a five-year trend of revenues and expenditures. Revenues rose modestly in 2023-24 — by about $603,000 — as district revenue sources started to decline from pandemic-era federal aid; expenditures rose about $2.8 million (3.4 percent), he said, driven largely by increases in special program instruction and support services.

Turney told the board the district’s consolidated statements show a much larger long-term liability picture because actuarial pension and other post-employment benefit (OPEB) obligations must be reported on a consolidated basis. He said the district’s net pension liability in the consolidated statement was about $115 million and that the consolidated “governmental activities net position” showed a deficit of roughly $88 million — a presentation artifact of how pension and OPEB obligations are recorded, not an immediate cash obligation the district must pay.

Turney said the audit included the required compliance testing of a federal program this year; the audit tested the National School Lunch Program and found no findings of noncompliance.

A board member asked whether recent staffing additions and negotiated pay increases were a main cause of the change in the district’s deficit. Turney replied that while local decisions such as staffing and raises affect annual operating results, much of the large consolidated change reflected actuarial assumptions and market-driven changes outside the district’s control.

Turney said detailed budget-vs.-actual schedules and further line-item comparisons are available in the electronic copy of the audit report should board members wish to review them.

The board did not take any additional action on the audit during the meeting; Turney concluded the presentation and invited questions.