Adam Sperick, the audit partner who presented the draft 2025 financial report to the New Hanover County Schools board, said the district's financial statements received a clean, unmodified opinion and that the audit produced no findings. "Luckily, it has no findings," Sperick told the board as he opened the audit presentation.

Sperick said the audit required implementing GASB 101 for sick-leave liabilities but stressed that change affects net position, not the district's spendable fund balance. He walked the board through the financial exhibits and highlighted that while the district's general fund showed a balance of roughly $3.89 million, much of that included nonspendable items such as inventory and prepaid expenses. "What you have available to appropriate is 1,000,000, $874,000," Sperick said, adding that the board had committed $500,000 for disaster recovery and that the unassigned general-fund amount was about $1,000,003.74.

Finance staff told the board they had identified $353,849 in underruns across capital projects — including replacement switch gear, softball field work and a child-nutrition freezer — and corrected that total to $355,272 after a $1,400 tally error was found. Staff proposed reallocating those savings to prioritized capital projects such as a lift station at Winter Park and a Myrtle Grove Middle School sidewalk, while noting that some capital funds are held by the county on a reimbursement basis and require county approval to reallocate.

The audit also underscored the difference between funds: the district's "other restricted" fund (Fund 8) holds about $23 million, a substantial reserve for restricted programs, while the general fund's immediately available resources are much smaller. Sperick recommended caution in writing binding board policy that mandates automatic set-asides of particular revenue sources because rigid rules can create unintended audit findings if circumstances require flexibility.

Staff and board members discussed options to rebuild the unassigned general fund balance over time, including moving indirect costs (for example, charging Child Nutrition indirect costs) and prioritizing projects in the budget process. Board members and auditors agreed any significant reallocation of county-held capital funds will require county cooperation and appropriate procedural approvals.

The audit partner said federal OMB audit supplements were still in draft form and that finalizing a few federal compliance letters remained a timing issue outside local control. The draft report and its opinion letter were provided to the board for review; staff said the final audit will be filed after federal guidance and local deadlines are set.

The board scheduled no immediate formal votes tied to the audit presentation beyond routine receipt of the draft; staff said corrections to the capital-savings tally would be made before the regular board meeting.