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Auditors give district a clean opinion; fund balance fell by $4.4 million from prior year
Summary
Lake Oswego School District 7J’s auditors issued an unqualified (clean) opinion on the district’s financial statements, but staff told the board the general‑fund balance dropped by about $4.4 million compared with June 30, 2023 and that the district expects to fall below board policy by the end of the fiscal year.
The Lake Oswego School District 7J board received the district’s 2023–24 audit report on Jan. 27; auditors issued an unqualified (clean) opinion on the financial statements and on compliance tests related to federal and state revenues, district staff said.
Chief financial staff explained the audited general‑fund balance is approximately $13 million and that it is about $4.4 million less than the balance reported at June 30, 2023 because “our costs exceeded the revenues by that amount.” The presenter warned the board that the district is on track to draw down reserves further during the current fiscal year and “we will be out of policy by the end of this fiscal year.” The presenter said the current balance still meets board policy at the time of the audit (about 10.3 percent), but projected spending may reduce that cushion.
The district’s auditors noted one over‑expenditure in the grants fund for an instruction category; otherwise the compliance opinions were unmodified. Staff also presented related audited financial statements for Lake Grove Park and noted a presentation error on a first draft: the district’s loan to the park (a $580,000 receivable) was initially presented as a current liability in the park’s governmental statements but staff corrected that for presentation in the final statements. The auditors flagged the presentation difference in the transmittal (governance) letter; staff said the auditors found no difficulties in executing the audit.
The audited report was posted the day of the meeting; staff described the item as informational and did not seek board action. Officials invited board members to contact finance staff with questions and to request additional detail on audited line items.
Board members asked clarifying questions about the Lake Grove Park loan, and staff confirmed the loan receivable is shown as a nonspendable receivable ($580,000) in the district’s budget statements and that the park’s capital projects explain the park fund drawdown.
The district will continue to report on reserves and budget status; any policy choices to address the projected reserve shortfall would require future board consideration and formal action.
