Southgate Community Schools audit receives clean opinion; USDA fund balance flagged

The Southgate Community School District’s June 2025 audit received an unmodified, or clean, opinion, auditor Daniel Clark told the school board at its Oct. 28 meeting. Clark, the signing principal on the audit, said the district’s financial statements were materially correct and the audit will be filed with the Michigan Department of Education by the Nov. 1 deadline.

Clark told the board the audit included an entity-wide beginning-balance adjustment tied to a Governmental Accounting Standards Board pronouncement governing compensated absences (accrued sick, vacation and comp time). “That impacted it about 4 and a half million dollars,” Clark said, explaining the change increased the liability on the entity-wide statements by approximately $4,500,000 but did not affect individual fund balances.

The auditors reported one management-letter comment related to the district’s food service fund. Clark said the U.S. Department of Agriculture requires that the fund not hold more than three months of expenditures in fund balance. “In your case, that would equate to about $600,000,” he said, adding that the district’s food-service fund balance was…