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Auditors give Charles County Public Schools a clean opinion, warn of fund‑balance drawdown and single‑audit timing risks
Summary
External auditors reported an unmodified opinion for CCPS but highlighted a significant drawdown of unassigned fund balance, a payroll accrual calculation error in the prior year, and possible delay to the district's single audit because the federal OMB compliance supplement remains in draft amid the federal shutdown.
External auditors told the Charles County Board of Education on Nov. 4 that they issued an unmodified ("clean") opinion on the district’s financial statements but flagged several management and reporting items the board should monitor.
The auditors, speaking during the district audit presentation introduced by CFO Karen Acton, said the district met the criteria for a clean opinion and had no material weaknesses or significant deficiencies in internal control that required reporting. "I'm happy to report you received an unmodified audit opinion," the auditor said during the presentation.
At the same time, auditors and staff noted the district used a significant portion of fund balance to cover expenses in the latest fiscal year and budgeted to use additional fund balance for FY26. Board members and the auditor discussed a drop in unassigned fund balance (from figures cited for prior years down to an unassigned balance reported as approximately $16,000,000) and cautioned that repeated drawdowns are not sustainable.
The audit also included a past‑adjustment journal entry: a payroll accrual calculation was understated in the prior year by roughly $7.7 million on the entity‑wide financial statements (an accrual issue under GASB across 10/11/12‑month pay structures created when migrating to the new ERP). Auditors described it as a management letter comment rather than a finding because it was not material to the financial statements.
A further timing risk emerged from the federal government shutdown: the OMB compliance supplement — used to guide single‑audit testing of federal programs — remains in draft nationally. The auditors said they will not issue the single audit until the supplement is finalized, which could delay the MSDE submission (single audit due to MSDE by 12/31 under usual timelines) and add workload if the final supplement requires additional testing.
Board members asked about internal control, IT testing tied to the new ERP, and recommendations the auditors could offer. The auditors said their firm includes IT specialists for system‑migration audits and will continue to provide management letters and suggestions for improvement where appropriate.
Next steps: The district will respond to management‑letter comments for submission to MSDE and continue work with auditors on any required follow‑up and timing for the single audit.
