Draft audit: Vernon Township shows improved balance but rising health‑benefit costs threaten next budget
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Summary
Auditor Ray Cerinelli presented a draft single audit and said the district’s budgetary basis shows improved balance and fund‑balance volatility tied to encumbrances; he and the business administrator warned of steep health‑benefit renewal increases (cited at ~26%), which could add about $660,000 for the first half of 2026 and complicate next year’s budget.
Ray Cerinelli of Nisavaccia presented a draft audit to the Vernon Township Board of Education on Nov. 20 and described the district’s current financial position and near‑term risks.
Cerinelli said the federal single‑audit compliance supplement was not yet final, so the firm prepared the audit on a draft basis and the state asked districts to file audits while omitting federal grant detail until the supplement is final. "We did our audit according to that draft," Cerinelli said, adding that the final compliance supplement is expected later; he told the board the federal portion is the only pending matter.
Reviewing schedule C‑1 (budgetary basis), Cerinelli said the district’s revenue mix remains heavily dependent on the local tax levy and that state aid was reduced notably several years ago. He told the board that a roughly $70,000 shortfall in federal revenue collection appears on the schedules and that fund‑balance changes are largely explained by year‑end encumbrances that reserve funds for expenses incurred but not yet paid.
Cerinelli walked through capital schedules and a new preschool grant (schedule E‑2) the district accounted for; he said the district used state preschool grant funds and approved a local transfer to build a preschool playground at Walnut Ridge to keep grant dollars in district programming.
The auditor reported no formal audit findings for the year and said there were zero recommendations requiring corrective action. "We did have 0 recommendations this year," he told the board.
In later committee and business‑office discussion, the finance committee reported a difficult health‑insurance market. Mr. Krauss and Business Administrator Mr. Slam summarized broker and market presentations: a 26% renewal increase for medical plans and about a 20% increase in prescription costs were presented by the broker, which the finance team said would amount to roughly $660,000 needed to cover the first six months of 2026 at the higher rates. The board discussed limited competitive quotes in the market and the district’s recommended plan renewals (medical through Horizon; prescription through OptumRx via Rx benefits) while noting the impact on next year’s budget.
Board members asked for continued monitoring of claims and said staff will seek funds for the first six months of next year and plan budget adjustments for subsequent periods if the market does not change. The board thanked the auditors and business‑office staff for the presentation.