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Union board receives clean audit; reporting correction tied to GASB 101 and arbitrage liability
Summary
At a regular board meeting the Union district presented a clean 2024–25 audit opinion from RSM US LLP while disclosing a reporting correction: an arbitrage liability was reclassified from fund-level statements to the government-wide statement and GASB 101 changed compensated-absence reporting.
Doctor Williams presented the Union School District's 2024'25 annual comprehensive financial report and said the district received a clean (unmodified) audit opinion from RSM US LLP.
Doctor Williams told the board the audit found a reporting weakness this year tied to an arbitrage liability in bond funds that was initially recorded at the fund level rather than on the government-wide financial statements. He said district staff and the auditors corrected the presentation and that the district will handle the matter differently going forward.
RSM manager Tino Robledo said the firm issued the unmodified opinion Dec. 4, and that an emphasis-of-matter paragraph accompanied the opinion to note changes in reporting rather than to qualify the opinion itself. Robledo described several significant estimates embedded in the financial statements, including pension and OPEB liabilities and the recently updated compensated-absence calculation required by GASB 101.
GASB 101 implementation required the district to change how it estimates and reports compensated absences. Doctor Williams pointed the board to the detail on page 45 of the report showing current compensated-absence liabilities of $1,800,000 and noncurrent compensated-absence liabilities of $4,800,000, figures that were restated as part of the accounting change.
Financial highlights presented to the board included total revenues reported at $229,500,000 and total expenditures of $224,600,000, producing an increase in net position of approximately $4,900,000 for the year. Doctor Williams said the general fund began the year with a fund balance of $18,725,000 and ended at $20,310,000.
The board asked clarifying questions about why the arbitrage liability had been booked at the fund level. Robledo explained governmental reporting uses both fund-level (near-term) and government-wide (full-accrual) presentations and that the arbitrage liability is a longer-term obligation more properly shown on the government-wide statement of net position; the auditors confirmed the item was identified and recorded but at the wrong presentation level and that it has been corrected.
Doctor Williams and the auditor noted the district did not have the compliance/single-audit report ready because federal compliance guidance for the single audit was delayed by a federal shutdown; they said the compliance report and single-audit work were underway and expected to be returned to the board in January.
Following the discussion the board moved to approve the 2024'25 audit report. A roll-call vote was taken and recorded in the transcript; the motion passed.
The auditors and district staff thanked the finance and treasury teams. Next steps noted to the board were completion and presentation of the compliance/single-audit report when federal guidelines permit and monitoring the application of GASB 101 going forward.
