Jones Company gives Eastern York SD an unqualified audit opinion; federal programs found compliant

Auditors from Jones Company told the Eastern York School District on Monday that the district's financial statements received an unqualified opinion and that federal-program compliance testing showed no errors or irregularities.

The unqualified opinion means, in the auditors' words, the district's financial statements "are adequately presented," Ed Evelyn, an auditor with Jones Company, told the board. He said the report was a single audit that included both financial statements and federal compliance testing.

Why it matters: An unqualified opinion is the standard clean report auditors issue when they do not find material misstatements in the financial statements. The audit also makes visible multi-year obligations that affect the district's fiscal planning, including pension and other postemployment benefit liabilities and a negative net position reported for the cafeteria fund.

Key findings and figures

- The auditors noted a general fund balance of about $10.67 million as of June 30, with general-fund assets reported at roughly $16.3 million and liabilities around $4.9 million. Ed Evelyn said those numbers are presented in the report in the fund-basis statements prepared by district staff.

- The capital projects fund carried a fund balance of about $5.4 million, and the student-activities fund showed about $107,000 in assets.

- The audit reports a governmental change in net position of about $6.4 million for the year and a general-fund net increase in fund balance of roughly $2.7 million for the year.

- The cafeteria (proprietary) fund showed a deficit net position of about $765,000; Evelyn said that deficit is driven primarily by net pension liabilities allocated to the cafeteria fund. He described the pension liability as a long-term obligation that would be addressed over time in budgeting and not as an immediate operating payment.

- Operating receipts for the cafeteria were about $452,000 and operating expenses about $1.8 million, producing an operating loss offset by federal and state reimbursements (for example, National School Lunch Program reimbursements) that brought the fund close to break-even for the year.

- Audit footnotes detail long-term debt and maturities: the district began the year with roughly $22.7 million in long-term liabilities (bonds, notes, capital leases, compensated absences) and ended with about $18.3 million after scheduled repayments; debt schedules show maturities through 2042.

Federal funds and single-audit testing

- The district received approximately $5.2 million in federal awards for the year (broken out across Title I, ESSER, National School Lunch Program and other grants) and the auditors said they tested ESSER (COVID-era grants) as a high-risk program and the National School Lunch Program as required coverage. "In our testing that we did, we did not find any errors or irregularities, and we feel that you're running your federal programs appropriately," Evelyn said.

- The auditors noted the ESSER funding was largely a one-time inflow and that the budget for federal awards in the coming year will be much smaller (roughly $625,000 for general-fund federal sources, per the presentation).

Management's discussion and disclosures

- The auditors pointed the board to management's discussion and analysis (MD&A) included in the audit booklet, which was prepared by district staff (Rosa and Kent were named as contributors). The auditors noted they review the MD&A for consistency with the audited numbers but do not give an opinion on MD&A text.

- Footnotes and schedules (pages 30'2 and beyond in the audit booklet) cover the pension plan and other postemployment benefits; auditors urged trustees to review the notes for the details on funding and actuarial assumptions.

District questions and auditor's responses

- Board members asked for clarification on how pension liabilities affect operations. Evelyn explained the pension liability is an actuarially determined long-term obligation rather than a current-year cash payment, and that the district shows annual pension expense on its financial statements in accordance with GASB reporting.

- The auditors also fielded questions about the cafeteria fund and how nonoperating revenue (state/federal reimbursements) offset operating losses attributable largely to pension expense and wage/benefit costs.

Next steps

- The board accepted the presentation and, by consensus, moved the audit report to the Thursday meeting agenda for formal approval. Evelyn told trustees auditors remain available to answer questions after members review the full report.

Quotes attributed

- "We feel that the audit report is adequately presented," Ed Evelyn, auditor, Jones Company, said, describing the opinion as unqualified.

- "In our testing that we did, we did not find any errors or irregularities, and we feel that you're running your federal programs appropriately," Evelyn said of federal-grant compliance testing.

Provenance

- topicintro: segment block_id "seg-1529.315" excerpt: "Thank you. So attached to the agenda is also a copy of the electronic copy of the audit report. But we have the auditors here from Jones Company that are, presenting the auditors for good. Mister Ed Evelyn and Eli Hofstetter..." - topfinish: segment block_id "seg-3374.9001" excerpt: "Alright. Well, like I said, if there's any additional questions tonight when you take it home and you look at it more thoroughly, give me a call tomorrow or anytime before than that because our our service, we don't feel stops at the day we give you the report, we walk out of here. You know, we're available for phone calls. Thank you."