External auditors give North Kingstown School Department a clean opinion; fund balance rises amid ESSER drawdown

The school district's external auditors presented the North Kingstown School Department's audited 2024 financial statements at the Feb. 11 meeting and reported a clean audit opinion, meaning auditors found no material misstatements in the financial statements.

Key results and why they matter: The school department ended fiscal 2024 with an unrestricted (general) fund balance of roughly $6.8 million, approximately 8.9% of the operating budget. The department's unrestricted fund balance rose by about $929,000 in fiscal 2024. Auditors said revenue was approximately $1 million above budget—primarily from stronger-than-expected investment earnings and higher state aid—and expenditures were about $2.1 million under budget, driven largely by salary and professional-services savings.

One-time items and near-term implications: Auditors noted a $1.7 million transfer from the unrestricted school fund to a separate capital projects fund for one-time capital appropriations. The school also expended about $1.9 million in federal Elementary and Secondary School Emergency Relief (ESSER) funds in 2024; auditors emphasized those grants were not renewed in 2025 and therefore represent a near-term revenue stream that will not recur.

Enterprise fund and other liabilities: The school lunch enterprise fund showed a net position decrease of about $56,000 in 2024, leaving a net position of about $1.9 million for that fund. Auditors summarized pension funding levels for the townwide MERS plan (83.9% funded) and the state teacher retirement plan (65.8% funded). The report also described the district's other post-employment benefit (OPEB) liability as a short bridge benefit for retirees before Medicare and currently maintained on a pay-as-you-go basis.

Recommendations and compliance: Auditors reported no reportable audit findings for 2024. They recommended ongoing cybersecurity training and vulnerability testing and said their federal compliance testing of ESSER and child-nutrition programs found no noncompliance.

Context and community questions: Committee members asked about appropriate fund-balance targets; the auditor said typical town-level unassigned/general fund balances often fall in the 8% to 16% range, so North Kingstown's 8.9% is a healthy position relative to its operating budget. The auditor also explained how capital transfers and one-time federal spending influenced the year-over-year fund-balance change.

What the district will do next: The auditor presented the statements, and district staff said they would use the results as they finalize the FY26 budget and plan future capital and operating priorities, noting the loss of ESSER funding will affect available resources in fiscal 2025 and beyond.