Chatham district audit: unmodified opinion and strong reserves; three minor recommendations noted
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Summary
PKF O'Connor Davies reported an unmodified audit opinion for fiscal year ending 06/30/2025, $13.6 million in general fund balance, and three minor management recommendations; the board voted to accept and file the audit.
John Farina, the audit director from PKF O'Connor Davies, presented the district’s FY 06/30/2025 audit and reported an unmodified (clean) opinion, the firm’s highest audit opinion. He told the board the audit was completed on Dec. 5 and that both the federal single‑audit and state single‑audit components were performed because the district met thresholds for federal and state expenditures.
Farina detailed the district’s financial position: a general fund balance of $13,600,000 with $2,400,000 unassigned (the maximum unassigned cushion allowed under state calculations); a capital reserve of about $8,700,000, a $3.6 million withdrawal used for capital projects during the year and about $3.8 million redeposited by year‑end for future facilities; and an excess surplus of $1,300,000 as of 06/30/2024 that decreased to $290,000 as of 06/30/2025 and will be used in the 2026–27 budget. Farina said the audit found no major exceptions in testing but included three minor recommendations in the management report related to screening activities, capital project accounting, and the extraordinary aid grant.
When asked whether an audit could prevent a hypothetical $19 million shortfall, Farina said audits examine internal controls, approval processes and records "to make sure there's proper procedures in place to record transactions, to approve transactions, and to safeguard district assets," but audits are not a guarantee against future fiscal events. The board confirmed the final reports will be posted on the district website and the administration will be authorized to file the required reports with the state and municipal securities authority.
Board members accepted the audit as an agenda action when the superintendent and business administrator recommended adding audit acceptance to the current agenda; the board approved the action by roll call. The audit management report and the single‑audit results will be available with the posted materials on the district website.