Auditor flags four routine accounting issues but gives Hawthorne district an unmodified opinion

Auditors delivering the Hawthorne Public School District's 2023—————————audit told the Board of Education on Jan. 14, 2025, they found four areas needing improvement but issued an unmodified opinion on the district's financial statements.

In a presentation, Mr. Swisher, the auditor, said the audit contained four findings and corresponding recommendations: bank reconciliations showing uncleared items older than one month; a lack of reconciliation between the district's internal accounting for federal grant expenditures and the state's grant drawdown system; errors and classification problems in the Application for State School Aid (ASSA) workpapers, including missing documentation for some low-income student classifications; and incomplete transportation reporting for certain nonpublic students where required forms were not on file.

The nut of the auditors' message: these items require correction but are commonly observed in other districts and do not change the overall audit opinion. "When we're done with our audit, we notice any issues, we may have a modified opinion. This past year, we did not have [a] modified opinion. We had an unmodified opinion," Mr. Swisher told the board.

Why it matters: an unmodified (clean) audit opinion indicates the financial statements fairly present the district's finances; however, the recommendations — if unaddressed — can affect internal controls, grant compliance and future reimbursements.

Details and recommendations - Bank reconciliations: The auditor recommended clearing outstanding reconciling items each period rather than allowing interfund and other reconciling items to remain for multiple periods. The auditor said some accounts reflected reconciling items more than a month old.

- Federal-grant reconciliations: The auditor advised the district to reconcile its internal grant accounting to the state —New Jersey Department of Education Office of Grant Management—drawdown records (the eWEIGHT system), noting that some federal grant expenditures had not been matched to drawdowns in the state system.

- ASSA workpapers and student classification: The audit noted errors in the workpapers used to support the district's ASSA submission and found instances where documentation supporting low-income classifications was missing. The auditor recommended that district staff review and ensure proper support for ASSA entries.

- Transportation reporting: The district was missing certain forms supporting nonpublic student transportation (identified in the audit as a needed B6T form). The auditor recommended ensuring required documentation is on file.

District response and context Business Administrator Janine Murray and board members asked clarifying questions during the presentation. Mr. Swisher characterized the findings as "standard ones" he has seen in other districts and said he had provided four recommendations in the written report. He also noted the district's fiscal health: surplus decreased slightly year over year but overall remains fiscally sound.

What the board will likely do next The auditor delivered the recommendations and offered them for the business office to implement. The board did not take immediate formal action during the presentation; the business office will be responsible for following up on reconciling procedures, grant reconciliation, supporting ASSA workpapers and transportation documentation.

Ending Board members thanked the auditor and the business office for the report. The auditor's clean opinion means the district's financial statements may be relied upon by the board, auditors and external stakeholders while the business office works to implement the four recommended corrections.