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Gresham-Barlow accepts district audit, approves corrective-action plan as leadership warns of multimillion-dollar budget gap
Summary
The Gresham-Barlow School Board accepted an unmodified annual financial audit and approved a corrective-action plan to address accounting findings; district leaders said a projected state funding shortfall could leave a $7 million to $11 million gap for 2025–26.
The Gresham-Barlow School District Board of Education accepted the district's 2023–24 annual comprehensive financial report and approved a corrective-action plan at its Feb. 5 meeting, district staff said.
Superintendent John Cook said the state K–12 budget proposal totals $11,360,000,000 but “does not keep pace with rising costs,” and district projections show a potential budget gap between $7 million and $11 million for the 2025–26 school year. Cook said the figures are subject to change as the legislative process continues and noted recent audit- and year-end accounting adjustments that affected the district's ending fund balance.
Margaret Breithout, director of accounting, presented the audit findings and the corrective-action plan. Breithout told the board the independent audit issued an unmodified opinion — the highest standard auditors can give — but identified a material weakness and several significant deficiencies in financial presentation and internal controls. She said the issues are largely presentational and process-related rather than cash shortages, and listed steps the business office will take to strengthen reconciliations, timing and presentation of debt-related items, and revenue/expense reporting.
“We agree with the auditors’ recommendations and have plans to implement regular reconciliation cycles and refined practices to align with generally accepted accounting principles,” Breithout said.
Board members praised the finance team for the extra work required to complete the deeper audit. Blake Peterson moved to accept the 2023–24 annual comprehensive financial report and to approve the corrective-action plan; the motion was seconded by Director David (surname not specified in the public transcript) and approved by the board.
The board's acceptance of the audit initiates the corrective-action timeline required by the Oregon Secretary of State. Breithout said the corrective measures focus on (1) more frequent year‑end and balance‑sheet reconciliations; (2) aligning bond premium and accreted interest presentation with accounting standards; and (3) stopping netting of revenue and expense in ways the auditors flagged for revision. She stressed the changes do not alter cash balances or the district's debt service obligations.
The board and administration said they will continue to brief the public and staff as budget planning proceeds and as corrective actions are implemented.
