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Southmoreland auditor gives unmodified opinion; board reviews fund balance, millage scenarios and budget uncertainties
Summary
Independent auditors gave the district an "unmodified opinion" on the 2023–24 financial statements, while board members pressed administrators on an unassigned fund balance above the PA threshold and on millage scenarios. Administrators urged advocacy for cyber charter funding reform as a potential revenue change.
Mark Turnley, the district’s independent auditor, told the Southmoreland School District board that the auditors issued an “unmodified opinion” on the 2023–24 audit and found no compliance findings for the federal school meal programs the audit tested. The district ended fiscal 2023–24 with a total general fund balance of $5,464,000, Turnley said, and an unassigned portion equal to about 10.4% of the current-year budget.
That unassigned level, Turnley said, “falls a little bit above the district’s fund balance policy,” and he explained the practical consequence: under Pennsylvania school code the commonly cited 8% threshold is used if a district ever needed to raise millage above the Act 1 index. “If you ever needed to do that,” Turnley said, “what you would do is anything above 8% you’d push into an assigned or a committed category.”
The auditor also highlighted a $40 million actuarial net pension liability that appears on the district’s consolidated balance sheet, noting it is an accounting entry rather than cash the district must pay immediately.
Business manager Pam (business manager/transportation director) reviewed the preliminary 2025–26 budget assumptions that drove a projected shortfall on the draft budget before any millage increase: higher salary and benefit estimates, a projected 10% increase for medical benefits pending the official rates, increased debt service and other line items that together produce a deficit in several millage scenarios presented to the board.
Administrators walked the board through possible millage actions in Westmoreland County tied to Act 1 limits and the state’s multi-county rebalancing. The district’s presentation showed a set of scenarios (0 mills, 1.5 mills, 2.5 mills and the Act 1 index of 3.4%) and the estimated effect on the median taxpayer and the projected year-end deficit under each scenario.
Pam urged board members and the community to advocate for cyber charter funding reform, saying the district could save an estimated $557,000 if the state reformed the cyber charter funding formula. “If you take those energies and please lobby for cyber charter reform, it could bring us $557,000,” she said.
Board members questioned the timing of the district’s budget process, noting that the Commonwealth often passes the state budget after school boards must adopt their local budgets. Trustees pressed administration for alternative cut options, and for clearer detail about which expenditures could be reduced if state revenues fell short.
On capital financing, administrators said the district has a $19 million Giza capital project/bond in process; presenters said they are monitoring municipal market rates closely and will try to secure favorable terms but reminded members that once bonds are sold the interest rate is fixed until any future refinancing.
The board approved several routine finance items during the meeting and took other actions described in the votes-at-a-glance list below.
