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Draft FY2025 audit shows clean opinion, highlights compensated-absence accounting change
Summary
An independent auditor presented a draft FY2025 audit for Bath County Schools reporting a clean opinion but an 'emphasis of matter' for a new compensated-absences accounting standard that increased accruals by $762,911; management and staff discussed fund balances, construction spending and steps needed to finalize the report after federal supplement approval.
An independent auditor presented the draft Bath County Schools fiscal year 2025 audited financial statements at the Oct. 27 board meeting, saying the reports are “fairly presented in all material respects” but remain drafts until the federal OMB compliance supplement for 2025 is finalized. The auditor said the federal supplement is awaiting approval because of a government shutdown, and the audit cannot be finalized until the supplement is approved and dated.
The auditor told the board the financial statements include a new GASB accounting pronouncement that expanded accruals for compensated absences to all employees, which increased the accrual by $762,911 and prompted an emphasis-of-matter paragraph. The presenter said the audit otherwise produced a clean opinion and no material weaknesses or significant deficiencies were identified in internal-control testing.
The auditor summarized key figures from management’s discussion and analysis: beginning cash of about $25.9 million and ending cash about $21.5 million, a general fund with revenues near $19.8 million and expenses near $20.4 million (a roughly $619,000 deficit requiring an interfund transfer), construction fund spending of about $5.3 million and a net position combining all funds near $28.4 million. The auditor also noted a large year-over-year revenue decline (about $31.9 million this year vs. $40.6 million the prior year), largely attributable to reduced state and federal funding.
The presenter said net pension liabilities for the county’s systems changed year to year (CERS and KTRS figures were discussed in the packet), and that required supplemental information — including pension schedules and the management’s discussion — is included. The auditor also said the district received certain state contributions for employee benefits during the year and that no prior audit findings required follow-up.
Board members had no substantive findings or objections in the meeting and thanked the auditor for the work. The draft audit remains subject to finalization once the compliance supplement is released; the auditor said finalizing will likely be a clerical dating step after approval by the responsible federal authority.
Next steps: the audit will be finalized and submitted when the federal OMB/OMB compliance supplement is released and staff can date and file the report. The board approved the audited financial report as presented on the consent agenda contingent on finalization procedures.
