External auditors give SFUSD a clean opinion; GASB 45 notes $700 million in retiree liabilities

External auditors told the San Francisco Unified School District board they issued an unqualified (clean) opinion on the district’s financial statements and highlighted two narrative items for board attention: the district’s first-year implementation of GASB 45 (recognizing post-employment retiree benefit liabilities) and certain estimates underlying that liability.

Audit representatives said the actuarial estimate of the district’s post-employment benefit liability is near $700 million and recommended readers consult the footnotes for detail. They also reported that reserves increased to about 3.6% for the fiscal year and that two relatively small audit adjustments (around $7 million) were recorded in restricted funds after deliberation between staff and auditors. The auditors noted one internal-control finding related to after-school program sign-in/sign-out sheets; staff said corrective steps have been taken.

Board members asked questions about specific items, including the nature of the audit adjustments and the mechanics of certain transfers; auditors and CFO Joe Grazioli offered to provide work papers and follow-up details where appropriate. Commissioners thanked audit and finance staff for the work and noted the report increased confidence in the district’s financial stewardship.

The board accepted the audit report by roll call as recorded in the meeting record.

The auditors also offered to meet individually with board members to review any aspect of the audit in detail.