Auditor says draft 'unmodified' opinion likely but final report delayed by OMB compliance supplement timing

District auditors presented the year-ending June 30, 2025 financial review at the Nov. 17 board meeting and described the audit as in draft pending federal and state compliance guidance.

David Phillips, the presenting auditor, said the federal OMB compliance supplement — delayed earlier by a federal shutdown — and the S.C. Department of Education’s annual audit guide are needed before issuing a final report. He said the firm is using draft guidance and expects the report to remain ‘‘unmodified’’ (a clean opinion) unless the supplement requires material changes.

Phillips highlighted the district’s fund balance and liquidity position: total fund balance was about $49.6 million with unassigned fund balance around $48 million, representing roughly 25–26% of recent or budgeted expenditures. He said the district compares favorably to common Government Finance Officers Association benchmarks for fund balance.

On operations, Phillips cited general-fund revenues of about $164.4 million (a roughly 6% increase over the prior year) and general-fund expenditures near $180.5 million (about an 8% increase), driven largely by salaries, benefits and one-time compensation adjustments such as step increases and a $2,500 schedule increase. He also reviewed special-projects, EIA, food-service, capital-projects and debt-service fund activity, with a capital-projects balance of roughly $29 million and outstanding capital commitments around $8.2 million at June 30.

Phillips discussed long-term liabilities: a modest decrease in net pension liability (about $4 million) alongside a substantial OPEB liability (he cited roughly $155.1 million and said the OPEB plan is about 10% funded). He cautioned that funding-rate adjustments and future contribution policy could affect employer costs.

Phillips closed by describing recent accounting changes (GASB 101 on compensated absences) and single-audit items he’d been tracking (including past ESSER procurement testing and SDE concerns). He said management’s cooperation and internal controls were strong and invited board questions.

The board took no immediate action on the draft audit; the auditor recommended formally issuing the draft to the board and returning only if material changes are required once federal/state guidance is finalized.