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Gilbert Public Schools accepts fiscal 2024 comprehensive financial report showing $28 million net position gain
Summary
The Gilbert Public Schools Governing Board accepted the district's draft Annual Comprehensive Financial Report for fiscal year 2024 after auditors reported a clean audit and staff described increases in net position, a large reported pension liability, and an outstanding judgment tied to Maricopa County property valuations.
The Gilbert Public Schools Governing Board unanimously accepted the district's Fiscal Year 2024 Annual Comprehensive Financial Report (ACFAR) at its Jan. 21 meeting after external auditors said the draft report was complete and they expected to issue an unmodified (clean) opinion.
The draft ACFAR showed a year-over-year increase in government-wide net position of about $28 million, bringing the district's reported net position to roughly $405 million. Bonnie Betts, who presented the financial statements, said that the government-wide figures include a large Arizona State Retirement System (ASRS) net pension liability that produces a negative restricted component in the district's net position.
Why it matters: the government-wide statements are used by bond buyers and credit analysts to assess a district's overall financial health. Board members were shown both the accrual-based government-wide results and the modified-accrual governmental fund results trustees review monthly.
Auditor: Jennifer Shields of Heinfeld, Meech & Co. told the board the audit team encountered no significant difficulties with management, no audit adjustments were required to reach the draft financials, and there were no disagreements about accounting principles. Shields said the firm expected to issue an unmodified opinion once final typographical checks and the federal "single audit" procedures are complete.
Key figures and issues presented by staff and auditors: Bonnie Betts said the district's reported ASRS net pension liability rose to roughly $278 million (about a $2 million increase year over year). Betts explained that GASB reporting requires that liability to be shown at the government-wide level and that the number reflects actuarial assumptions applied at the statewide retirement system level rather than a direct cash obligation the district must pay immediately.
Betts also reviewed a court judgment tied to Maricopa County property valuations that the district must recognize in 2024 reporting. She said the total Gilbert Public Schools judgment was about $5.85 million; staff told trustees they expect the Arizona Department of Education to recalculate state aid that could result in roughly $4 million of state reimbursement, and that the district's remaining local cash impact was described during discussion (staff noted different characterizations in the meeting exchange). Betts emphasized the district had sufficient cash on hand and would not need to increase the tax rate to cover the accounting recognition.
Other notable items: the report reflected about $22 million of bond-fund spending in 2024 on facilities projects; a $20 million prepayment of pension contributions into ASRS (reported as a prepaid asset that has since earned investment income and grown to about $22.3 million); a drawdown in certain governmental fund balances tied to capital spending; and a decline in the employee-benefit trust fund balance from roughly $25.3 million to $24.1 million, partially offset by higher investment earnings.
Board action: Board President Chad Thompson called for a motion and the board voted by roll call. Joan (Jill) Humphreys, Chad Thompson, Jesse Brainard, Blake Buberson, and Sheena Murray each voted "aye," making the acceptance unanimous.
What was not decided: the ACFAR presented was a draft at the time of the meeting; auditors and staff said typographical edits and the federal single-audit procedures remained to be completed before the final published report was issued.
The board also approved routine consent items and meeting minutes earlier in the meeting; those votes were separate from the ACFAR acceptance.
Looking ahead: staff said they would return any material corrections to the board if discovered during final audit procedures. Betts and the auditors also noted the single-audit work covering federal grant expenditures remained in progress but did not identify any disagreements with management during the audit.
Sources: presentation and Q&A on the ACFAR by Bonnie Betts and Jennifer Shields during the Jan. 21, 2025 Gilbert Public Schools Governing Board meeting, and the board's roll-call vote accepting the report.
