Johnson City Schools reports $3.2M net decrease in fund balance; internal audit finds eight internal-school-fund issues
Summary
Finance staff reported October revenues of $8,583,000 and expenditures of $8,649,000, leaving a $3.2 million net decrease and an October fund balance of $15,376,000 (about $1,748,000 below target). An external audit of internal school funds issued a clean opinion but documented eight findings related to purchase orders, documentation, and deposit timeliness.
The Johnson City Schools finance director presented the district’s finance report for the month ended Oct. 31, 2025, reporting revenues of $8,583,000 and expenditures of $8,649,000 for the month, leaving a net decrease in fund balance of $3,200,000. The October fund balance stood at $15,376,000, which the finance report said was about $1,748,000 below target. Local option sales tax collections were reported 6.2% above last year.
Leah Veil also reported PEP account activity through October: $303,000 deposited for the city and $180,000 for schools; year-to-date PEP sales tax growth of 4.9%. Transfers from the PEP account cited in the presentation included $2,360,000 for the secure vestibules project and $33,990,000 for south-side HVAC; the account balance at month-end was $4,076,000. The city provided a post-report spreadsheet of projects for periodic updates.
An external auditor from ClearPoint CPAs presented the internal school funds audit for the fiscal year ended June 30, 2025. The partner noted the audit resulted in a technically unmodified (clean) opinion but identified eight findings: missing preapproved purchase orders, missing supporting documentation for disbursements, invoices not canceled upon receipt, incomplete fundraiser approvals and accounting, incorrect sales-tax handling, and deposits not made within the required three business days. The auditor said many findings were attributable to turnover among school bookkeepers and that most prior-year exceptions had been corrected.
The board moved and approved the financial report and accepted the internal school funds audit by voice votes. Board members asked follow-up questions about Freedom Hall utility reimbursements and requested the district provide the free/reduced lunch percentage for budgeting next month.
Note: dollar amounts and transfer figures are reported as stated in the meeting materials and spoken report.
