Eide Bailly auditor Terry Gage presented the Elko County School District’s audit for the fiscal year ending June 30, 2025, to the board on Dec. 1 and described both routine financial statements and several significant audit matters.

Gage said the audit delivers an unmodified opinion on most fund financial statements but a qualified (modified) opinion on the district’s full‑accrual governmental activities related to GASB Statement 101 (compensated absences). The auditor explained the qualification arose because reports from the district’s accounting system did not match leave balances in the employee portal and, given the system change and staff resources required to reconcile, the auditors could not support the compensated‑absence liability without qualification.

Key audit figures and liabilities Gage highlighted included:

• Net position: the combined full‑accrual statements show a net position deficit of about $17.6 million.

• Pension (PERS): the district’s proportionate share of the state net pension liability is reported at roughly $111 million.

• OPEB: other post‑employment benefit liability (retiree healthcare) is reported near $148 million.

The audit also identified compliance and reporting issues: several funds exceeded budgeted authority (the general fund’s regular programs by about $906,000, building and sites by $36,000, self‑insurance by $171,000, and unemployment compensation by $13,000). Auditors reported multiple funds with deficit cash balances that function as interfund loans; in some cases the board had not approved interfund loan resolutions for the amounts outstanding (the health insurance fund showed a $4.4 million interfund loan vs. an approved $1 million authorization). Audit adjustments were mostly year‑end (period‑13) entries and the auditor said routine reconciliations during the year were generally in order.

The self‑insurance fund remains a concern. The audit reported an FY25 deficit of about $7.5 million despite recent premium increases; district transfers from the general fund covered much of the prior shortfall but auditors urged continuing rate and reserve review.

Gage said the district’s single audit (federal grant component) is pending release of a federal compliance supplement; the single audit will add any federal program findings when that report is complete.

What happens next: the board accepted the audit as presented. District staff and the board discussed corrective actions, the timing of required state responses for budget over‑expenditures and interfund loan approvals, and next steps to reconcile compensated‑absence reporting in the new ERP system.

Why it matters: the audit frames the district’s near‑term fiscal choices (budget augmentations, transfers to special funds, and possible program or staffing adjustments) and underscores the need for clear audit trails on large restricted funds (for example, the Oahe project state funds). The qualified opinion on compensated absences does not affect the fund‑level opinions but is material to the full‑accrual picture and will need remediation before future audits.