The independent audit of Batavia USD 101 returned a clean, unmodified opinion, the board heard Tuesday.

Dan Shaw, the principal auditor invited to speak, summarized the 147-page audit and said auditors found no material weaknesses requiring modification. He noted two current-year recommendations: timing issues in the capital projects fund and a general advisory to maintain vigilance on IT controls because of rising cyber threats.

"We provide a clean, unmodified opinion," Shaw told trustees, and pointed the board to the management discussion and analysis for narrative context on year-to-year fluctuations (Dan Shaw).

The board then heard a detailed financial forecast from Chief School Business Official Tony (speaker 23). Tony said the district built a multi-year projection into the FY26 budget and is planning a $14 million transfer from fund balance into the capital projects fund this fiscal year to fund the district's Warm, Safe, Dry program.

"That $14,000,000 isn't sustainable," Tony said, warning that construction inflation and continued transfers could erode the district's minimum fund-balance threshold in out years. He said the forecast shows operating increases in the general fund this year — largely driven by higher property tax collections and lower expenditures — but that planned capital transfers and escalating construction costs could create deficits in later years unless the board adjusts levers like staffing or capital timing.

Tony emphasized that 90% of the district's revenue comes from local property tax dollars and explained the tax-cap (Property Tax Extension Limitation Law) constraints that limit operating tax increases to CPI (or 5%, whichever is less) plus new construction.

Board members asked for clarification about the single largest drivers of risk and discussed options the district could use to manage fund balance and capital spending. Trustees noted that paying off long-term debt this year will lower the tax rate for homeowners but does not eliminate the need for long-term capital planning or options to manage projected deficits.