Board approves first interim financial report after CBO details audit adjustments and reserves

The Palmdale Aerospace Academy District board voted to approve its 2025‑26 first interim financial report after the district’s finance lead reviewed enrollment, revenue assumptions and several accounting adjustments.

The CBO told the board that October census day recorded 2,303 students, producing an increase in the Local Control Funding Formula amount because the district had 23 more students than projected. The presenter said the federal audit’s completion was delayed due to a government shutdown and the district requested an authorizer extension (Palmdale School District) to Jan. 30; staff hoped to have a final audit report by the December meeting.

On adjustments, the presenter said auditors and staff identified $523,000 in audit adjustments that would reduce fund balance, a $167,000 health and welfare posting omission, and a separate $324,000 state overpayment related to a bond‑lease funding item that would also affect revenue. The CBO said bond covenants were currently met but outlined thresholds (for example, a ratio that would trigger assignment of an investment manager if it fell between 1.1 and 1.2 and default if below 1.1).

The presentation flagged the unduplicated pupil percentage (UPP) at roughly 69 percent and noted roughly 500 missing parent documents; the CBO said a sustained 69 percent UPP could cost about $400,000 this year and up to $1.2 million over three years in supplemental and concentration grant funding. Staff described plans to push parent outreach and to change registration processes to collect documents more reliably.

After questions from board members about COLA assumptions and reserves, a motion to approve the first interim report passed by voice vote.

Next steps: staff will submit the interim to the authorizer and return to the board with any final audit adjustments and a multi‑year facilities projection required by the bond covenant process.