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Auditor gives Edwardsburg Public Schools an unmodified opinion; finds material weakness and reports large pension liability
Summary
The district's external auditor delivered the 2024 audit, issuing an unmodified opinion on the financial statements while identifying a material weakness in internal control and a significant net pension liability that produced an unrestricted deficit. The board accepted the financial report by voice vote.
The external auditor for Edwardsburg Public Schools presented the district's 2024 financial statements and management's discussion and analysis, issuing an unmodified opinion on the financial statements while noting several findings the board must address.
The auditor told the board the implementation of GASB 101 (a new accounting pronouncement for compensated absences) affected the statements. The presentation highlighted an unrestricted deficit of approximately 31,200,000 and a net pension liability of about 31,900,000; the auditor said the two figures closely correspond and are the primary drivers of the reported deficit. The auditor also said the implementation of GASB 101 decreased net position by roughly 2,800,000 compared with prior calculations.
On fund balances, the auditor reported the unassigned general fund balance represents 22.5% of annual general fund expenditures, with total general fund balance at 29.8%. The recently created Building and Site fund showed an ending balance of 17,300,000 related to bond proceeds; the auditor noted that as projects are spent down that balance will decline.
The single-audit review identified a material weakness in the financial statements and a significant deficiency related to federal awards; the auditor said a modified opinion was issued on the child nutrition cluster portion of the audit. The auditor listed several comments and recommendations, including strengthening internal controls around athletic ticket sales, periodically reviewing user access in accounting systems, and preparing a spend-down plan for an excess food service fund balance. When asked about the food service excess, the auditor estimated the amount qualifying for a spend-down plan at about 40,000 and suggested options such as increasing wages or equipment purchases.
District staff thanked the audit team. The board then moved to accept the financial report as presented; the motion passed by voice vote.
