Bath County board approves FY25 audited financial report; auditor says final federal supplement still pending

The Bath County Board of Education on Oct. 27 approved the school district's fiscal year 2025 Annual Financial Report after an independent auditor presented a draft audit that received a clean opinion.

The auditor told the board the financial statements "are fairly presented in all material respects in accordance with generally accepted accounting principles," and that the audit and the single-audit testing of federal programs showed "no material weaknesses, no significant deficiencies, no noncompliance," calling it "a clean report." The auditor also warned the board the audit remains a draft until the Office of Management and Budget's (OMB) compliance supplement is formally approved; a government shutdown has delayed that approval.

The board approved the consent agenda that included the annual audited financial report as part of a package of routine items. The motion to approve item 6 (consent items including the AFR) was made by Carla and seconded by Eric; the board voted in favor by voice vote and the chair declared the motion carried.

Why it matters: The audit presents a snapshot of the district's finances and federal compliance for the year ending June 30, 2025. The auditor emphasized two items that board members and the public should note: a newly adopted accounting standard for accrued compensated absences increased the district's accrual by $762,911, and total revenues fell substantially from the prior year primarily because state and federal funding were lower.

Key findings and figures: The auditor said the district began the year with almost $25.9 million in cash and ended with about $21.5 million, a decrease mostly tied to construction spending. Combined net position across all funds was reported at about $28.4 million, up from about $26.0 million the prior year. Total revenues for the year were about $31.9 million versus $40.6 million the previous year; total expenses were about $29.6 million. The general fund closed with just under $7.2 million in cash and reported a revenues-under-expenditures gap of roughly $619,000, which was covered by a transfer from capital projects.

The auditor also highlighted restatement of beginning net position due to implementation of GASB guidance on accrued compensated absences (referred to in the presentation as GASB 101), noting an adjustment of roughly $6.76 million. The district reported federal expenditures of about $4.3 million, and Title I was tested as a major federal program (just under $1.1 million in expenditures).

Management letter and minor recommendations: Although the district had no reportable internal-control findings, the auditor's management letter included three recommendations requiring follow-up: timely submission of booster-club annual financial reports at several schools, completion of fundraiser summary forms at Owingsville Elementary, and late submission of annual financial reports at Crossroads and Goinsville elementary schools. The auditor said the district tested estimates for leased assets, net pension liability and OPEB and found those estimates reasonable.

Board action and next steps: The board approved the audited financial report as presented. The auditor explained that as soon as the OMB compliance supplement is approved and the auditor can date the report, the audit will be finalized and ready for filing. The auditor told the board they do not expect changes to the supplement but could not finalize the report while the federal approval remained pending due to the shutdown.

The district will address the management-letter items and will finalize and file the audit after the OMB supplement is released and approved.