Niagara Falls school board accepts clean external audit; general fund grew $4.2 million

The Niagara Falls City School District board voted Oct. 15 to accept the district's external audit for the year ended June 30, 2025, after auditors reported an unmodified (clean) opinion and district staff described an increase in reserves.

Drescher & Malecki auditors told the board their work produced “an unmodified opinion” and that the district’s financial statements “are fairly stated” for the year ending 06/30/2025. Superintendent Mark Lohrey said the district’s general fund increased by $4,200,000 in 2024–25 and recommended the board approve the audit at the voting meeting that followed the agenda review.

The auditors presented trend data showing that general fund revenues have exceeded expenditures in each of the last five years, a pattern they described as positive because it generates fund balance. The district’s total fund balance was reported to have risen from about $52.7 million to approximately $56.9 million, with roughly $46.8 million in restricted reserves, including the employee benefits reserve (about $14.4 million), workers’ compensation, debt service and retirement reserves for ERS/TRS.

On the school lunch (child nutrition) fund, auditors noted relatively stable revenues and expenditures over the last three years; the fund experienced a drawdown in 2024–25 tied to capital purchases for cafeteria equipment, reducing that fund’s balance by roughly $136,000. Lohrey and staff said the district spent about $120,000 from that reserve to replace aging kitchen equipment as part of a plan to keep the fund at levels consistent with state guidance (the district noted a three-month average as a benchmark).

Auditors also said they completed the financial statement audit component and would file with New York State within days; the federal single-audit compliance conclusion is pending final federal guidance, which is delayed this year. The auditors reported no material weaknesses or significant deficiencies in internal control.

Board members moved to accept the audit and, after a roll-call vote, the measure was approved (vote tally recorded in the meeting roll calls). In remarks to the board, Lohrey praised staff and said the district has secured clean audits for six consecutive years.

The item was discussed at length by the audit committee earlier the same day, and the committee recommended board approval. The superintendent said the district will accompany the state filing with a legal letter disclosing ongoing legal matters, including child-victim cases, which the district reported in that legal disclosure.

Board members and auditors cautioned that while reserves grew this year, the gap between revenues and expenditures is narrowing, and that future budget cycles may be more challenging. The district plans to monitor state and federal funding developments as part of next year’s budget process.

The board accepted the auditors’ recommendation to submit the financial-statement audit to the state within days and to finalize the filing once any remaining federal guidance is issued.