Kershaw County schools receive clean audit; auditors flag ESSER drop and a bookkeeping retainage error

The Kershaw County School District received an unmodified — or "clean" — audit opinion at its board meeting, district auditors told trustees, and finance staff were urged to continue strengthening internal controls as federal pandemic-era aid ends.

"We did issue an unmodified opinion," the auditor said, summarizing the year’s financial statements and the scope of the district audit. The auditor reported the district’s general fund balance at $20,800,000, an increase of roughly $1.5 million from the prior year, and an unassigned fund balance of $17,800,000, which the auditor said represents 14.8% of the district’s FY25 budgeted expenditures. By comparison, the Government Finance Officers Association recommends a minimum of 16.67%; the district’s own policy requires 12%.

The auditor warned trustees that ESSER and other COVID-era funding streams are winding down: roughly $11.4 million in ESSER‑funded spending used in FY24 will not recur, and the district has budgeted an anticipated use of fund balance for FY25 to manage that transition.

On other key numbers, the auditor reported general fund revenues of about $108.3 million (a 7.6% increase from the prior year) and general fund expenditures of about $111.0 million (a 9% increase). The district’s capital assets totaled about $282.2 million, with roughly $13.3 million in annual depreciation — a level the auditor said the district should aim to match with capital spending to avoid falling behind on maintenance and replacements. Outstanding debt decreased by about $17.2 million from the prior year because of regularly scheduled principal payments; projected FY25 debt service payments are roughly $21.4 million.

The auditors performed a required single audit of federal awards and reported no compliance issues with the USDA or ESSER programs. They did, however, record one finding related to a year‑end accrual: finance staff pulled an incorrect line from AIA documentation and initially over‑accrued a retainage payable balance. The auditor said the error was adjusted and the financial statements were corrected.

Board members used the audit presentation to press for clarity about restricted funds and internal controls. "Specified monies have to be used for that revenue stream for which they're intended," Dr. King said, noting that bond proceeds and building funds cannot legally be redirected to pay salaries. Trustees also praised district finance staff: one board member called the chief financial officer "one of the best CFOs I’ve ever worked with."

In a separate discussion, finance staff reported that the district’s food service fund showed a balance of about $9.7 million as of June 30 and that the district must monitor USDA thresholds that could require a formal spend‑down plan once balances reach about 30% of expenditures. Staff described constraints on allowable federal food‑service spending — for example, federal funds can pay for equipment but typically cannot pay for building partitions or permanent construction — and warned that lead times for large equipment purchases can slow spend‑down efforts.

The audit presentation concluded with auditors encouraging the board to maintain periodic risk assessments and to remain vigilant about internal controls and cash‑handling procedures at both district and school levels.

The board took no separate action on the audit at the meeting; the presentation was provided for trustees' information and oversight.