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District audit: unqualified opinion; fund balance strong but state budget risk flagged
Summary
External auditors gave Baldwin-Whitehall an unqualified (clean) draft opinion for 2024–25 and reported a roughly $31 million fund balance and $86 million in debt. Administrators warned that a state budget stalemate could exhaust district cash by February without action.
External auditors presented a draft audit for the 2024–25 fiscal year and issued an unqualified (clean) opinion, the highest level of audit opinion, the auditors told the board.
Grant Martin and Chad Agnew, the auditors, summarized key financial metrics: the district’s five-year fund-balance history showed about $31 million in total fund balance with roughly $3.3 million in net income for the year; total bonded debt is presented at about $86 million. Auditors cautioned that fund balance is an accounting measure and does not equal cash on hand.
The business office highlighted revenue and expenditure variances: revenues exceeded budget by about $6 million while expenditures were approximately $3 million over budget. The auditors noted the federal share of revenue decreased (largely due to the end of COVID-era funding), and interest income and some state ‘ready-to-learn’ adequacy funds contributed to better-than-expected local revenues.
Board members and finance staff also discussed liquidity risks tied to a state budget impasse. Finance staff said if the state does not pass a budget, the district could run out of funds as early as February, since each payroll costs roughly $2.5 million. “We could borrow money,” the business manager said, but borrowing imposes interest costs the district must absorb. The business office described other options districts are considering, including short-term borrowing, program cuts, or worse-case temporary closures if state aid is not forthcoming.
Auditors identified prior internal-control commentary about segregation of duties but explained changes in industry practice and removed that comment from the draft report after reassessment; they nonetheless encouraged continued attention to separation of duties where feasible.
Auditors said the audit draft contains only minor proofreading items that are not expected to change the substantive findings. The board did not vote on the draft audit; administrators said they expect to issue a final report after completing proofing.
