Auditor reports anticipated 'clean' opinion for Cornwall‑Lebanon financial statements; federal single‑audit finalization delayed

Jeffrey Kowalczyk, the engagement auditor representing Barbara Kane Thornton, presented the district’s financial statement audit for the year ended June 30, 2025, and told the board he is "anticipating issuing a clean or unmodified opinion on the financial statements" and an unmodified opinion on compliance for major federal programs.

Kowalczyk explained that final federal guidance (the federal compliance supplement) was delayed — first by the complexity of changes to auditing standards and later by a federal government shutdown — and that auditors are awaiting the final supplement to complete and formally issue the federal single audit. "At this point, it's a waiting game to see when the government reopens and then after that, how many additional weeks they need to finalize," Kowalczyk said.

He also described a new accounting standard affecting compensated absences (accrued sick and vacation time) that increased the district’s entity‑wide compensated‑absence liability by approximately $5.4 million. Kowalczyk emphasized that the compensated‑absences recognition affects entity‑wide, full‑accrual statements and notes but does not alter the district’s general‑fund (budgetary/cash) position.

Board members asked about timing for final audit approval. Administration recommended delaying formal acceptance until federal guidance is released and suggested certifying the audit in January if necessary; the board discussed scheduling a motion to finalize the report at that later meeting.

Next step: administration and the auditor will wait for the federal compliance supplement; the auditor indicated he does not expect additional testing will be required and expects issuance of clean opinions once the supplement is finalized.