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External auditor gives Kearney R‑I a clean opinion but federal audit remains 'draft' pending OMB guidance
Summary
Westbrook & Company told the Kearney R‑I board the district received an unmodified audit opinion on its financial statements but the federal program audit is stamped "draft" because the OMB compliance supplement has not been released; the auditor cited a $278,000 food-service decrease and $21 million in unspent bond proceeds.
Brian Eckoff of Westbrook & Company briefed the Kearney R‑I Board of Education on the district’s fiscal year audit and said the financial statements will carry a clean, unmodified opinion.
"If you look through that, you'll see that the red box says presented fairly," Eckoff said, adding that the firm was required to stamp the federal program audit as "draft" until the U.S. Office of Management and Budget issues the annual compliance supplement.
The auditor explained the timing constraint: because the district has more than $750,000 in federal expenditures, Westbrook must audit federal programs under the OMB compliance supplement. "We are not allowed to actually release your federal program audit...so it's gonna be stamped draft right now," Eckoff said, and he told trustees the district will likely approve the financial statement audit at the December meeting and the federal audit later once guidance is available.
Eckoff highlighted several financial details trustees asked about. He said the food-service program had a $278,000 decrease this year and that the district reported roughly $40 million in total assets. The capital projects fund showed $21 million in unspent bond proceeds and a $1.3 million remaining balance earmarked for future projects. The general fund had a decrease in fund balance of $913,000, which the auditor described as a planned drawdown related largely to bond and capital project spending.
On internal control, Eckoff reported no deficiencies identified in the audit; on federal program testing he said no findings were noted using last year’s compliance supplement but cautioned that changes to the new supplement could require additional audit work. "If the new compliance supplement comes out with changes, we will then send our federal program auditor back to do the additional work," he told the board.
Trustees asked procedural questions about the timing and whether the draft status would delay required filings. Eckoff said the financial statements will be finalized for DESE submission after the board’s December approval, while the federal program report will be finalized once OMB issues its guidance. The board did not take formal action on the audit tonight beyond reviewing the draft materials.
The next procedural step: the board is expected to consider approval of financial statements at its December meeting and to revisit the federal program audit when the OMB compliance supplement is available.
