Audit shows clean opinions; general fund balance dipped and child nutrition ran a loss

Dale Smith, CPA and partner at Anderson, Smith & White, told the board the FY24–25 comprehensive annual financial report will be finalized pending a federal compliance supplement and that the firm issued a clean (unmodified) opinion on the financial statements and three clean compliance letters.

Key figures Smith cited: the general fund had about $7.0 million in cash and cash equivalents at June 30, 2025, and the district's reported fund balance decreased by roughly $736,000 from 06/30/2024. Staff and auditors noted the district is planning to use about $1.0 million of fund balance to balance the FY25–26 budget; auditors cautioned that continued use of that level could push unassigned fund balance toward the district's lower policy limit.

On the Child Nutrition fund, the audit shows a reported operating loss of about $676,003 for the year (an improvement of roughly $120,000 from the prior year's larger loss), a $389,000 increase in state and federal reimbursements offset by higher labor costs and lower food sales, and year‑end cash of roughly $2.3 million. Auditors warned that sustained losses could jeopardize the district's ability to continue charging indirect costs to the program.

The auditors also discussed the implementation of GASB guidance requiring recognition of liabilities for anticipated sick leave usage; they said the change affects the full‑accrual statements but not budgetary fund statements.

Board members asked for school‑level fund balance details and additional clarification on formulas and liabilities; staff agreed to provide supporting schedules and to circulate the phase 2 geotechnical and environmental reports linked to the agenda materials.