Audit panel accepts FY2023 Concord‑Carlisle regional school district audit; governance letter to be sent to select board

The Financial Audit Advisory Committee voted Sept. 18 to accept the FY2023 audit for the Concord‑Carlisle Regional School District and agreed to forward a governance letter summarizing the results to the select board.

The audit presentation was led by Scott McIntyre, a partner at the auditing firm, who told the committee that the firm follows U.S. generally accepted auditing standards, government auditing standards and OMB Uniform Guidance and that the governance letter is the key communication to those charged with governance. "We identified the significant risks of management override of controls and improper revenue recognition," McIntyre said, and added that the firm had designed tests to address those risks.

McIntyre reported that, in the auditors' view, the district's financial statements are "materially fairly presented" for FY2023. He highlighted several points the committee discussed: the district's net pension position swung from about a $600,000 asset in the prior year to roughly a $3.5 million net pension liability as of June 30, 2023, driven in part by 2022 investment results; the net OPEB liability declined to approximately $7.9 million from about $11.0 million the prior year, with the OPEB plan about 64% funded; and the retirement system measured at the plan date was about 87% funded.

On short‑term liquidity, McIntyre noted the unassigned general fund balance was roughly $2.10 million — about 5% of general fund operating expenditures — an increase of about $200,000 from the prior year. He also explained that the district's assigned fund balance (about $1.3 million) included roughly $1.0 million of encumbrances carried forward and approximately $300,000 of E&D used in FY23, and that $699,000 of restricted funds represent bond premium that state law requires be used to reduce future debt service assessments.

Reviewing budget performance, McIntyre said total revenues exceeded budget by about $495,000 in FY23, largely driven by favorable investment earnings, and expenditures underspent the final budget by about $155,000, producing a combined favorable variance of approximately $651,000 before E&D usage.

Committee members asked detailed questions about custodial and revolving funds (including adult education, facilities, and athletic revolving accounts), lease accounting for buses under the new standards, and components of 'fixed charges' and grant revenue classifications. McIntyre and district staff said they would follow up with additional detail where necessary.

After discussion, the committee moved and seconded a motion to accept the audit as presented; a roll call recorded support from the voting members present (Bianca: yes; Brian Watterson: aye; Cynthia Rainey: yes; Chair Wendy Hovelli: yes). The committee agreed to draft and send a letter summarizing the results to the select board and to copy the chairs of the school committee. The CMLP audit was not completed today and was deferred to a future meeting; the committee scheduled an Oct. 9 meeting at 10:00 a.m. to review the CMLP audit.

The auditors did not issue a separate management letter; McIntyre said the governance letter communicates matters required by professional standards and that no significant deficiencies or material weaknesses were identified that would have triggered a management letter. The committee accepted the governance letter and the FY2023 audit and adjourned.

The committee's next meeting to review the deferred CMLP audit is scheduled for Oct. 9 at 10:00 a.m.