Auditors give Shippensburg Area SD a clean opinion; district reports $590,550 general‑fund surplus and warns of future budget gaps

Auditors from Boyer & Ritter presented a clean set of audit opinions for the 2023–24 fiscal year and district staff outlined current fund balances and early 2025–26 budget scenarios.

The district’s independent auditor, Tina Gipe, told the committee the audit produced three unmodified opinions — one on the financial statements, one on internal control and compliance, and one on compliance for the district’s tested federal program. “This is the best possible result that we as auditors can provide,” Gipe said, summarizing the opinion on the financial statements.

The audit showed the district spent approximately $6.7 million in federal funds during the year, triggering a single‑audit (uniform guidance) review; the auditor reported an unmodified opinion on the child nutrition cluster, which had about $1.8 million in expenditures. Gipe said auditors identified no material weaknesses or reportable compliance issues and that all proposed adjustments were posted by management.

Business administrator Caleb presented the district’s fund balances and early projections. He said taxes make up about 53% of general‑fund revenue while state and federal sources provide roughly 43%. For 2023–24, the district’s revenues exceeded budget by about $3.9 million, while expenditures were about $1.6 million above budget in support services. That produced an increase in the general‑fund balance of $590,550, which Caleb described as “added back into our general fund balance.”

Looking to 2025–26, staff ran three scenarios: no tax increase, a 3% tax increase, and an Act 1 index (5.3%) tax increase. With the assumptions used, a no‑tax scenario produced a projected deficit of about $4.6 million; a 3% increase reduced the gap to roughly $3.5 million; and the full Act 1 index narrowed it to about $2.8 million. Caleb noted the district had not included one‑time additions to revenue (such as the state’s “adequacy” payment of about $1.2 million and a roughly $300,000 cyber‑charter reimbursement) because their continuation is uncertain.

Committee members pressed staff on drivers of cost growth. Caleb pointed to rising medical insurance claims — the district’s consortium reported medical‑insurance increases of about 15% last year and an estimated 10% next year, which he said equals roughly $800,000 additional cost — and PSERS employer contribution increases (projected from about $9.2 million to $9.6 million at a 34% rate). He also highlighted growing tuition and transportation costs (cyber charter tuition and nonpublic tuition), and special‑education costs that have risen while the state subsidy for special education has remained essentially flat.

The auditors told the board that forthcoming accounting standard changes should alter the appearance of some financial‑statement lines (compensated absences and other financial reporting model improvements), but that those changes do not affect day‑to‑day operations. Gipe offered to assist management with implementation.

The audit report and management letters will be posted with the financial statements and were placed on the agenda for future formal approval, the administration said.

Ending note: the business office emphasized the budget remains in an early stage — salary and collective‑bargaining negotiations are ongoing and will materially affect 2025–26 projections. The administration recommended continuing a conservative revenue forecast until state revenue decisions (including the governor’s budget) and contract settlements are certain.