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LBMC presents draft clean audit; audit committee recommends external review and board seeks APA coordination
Summary
External auditors LBMC presented a draft unmodified opinion on Fayette County’s 2025 financial statements, cited a GASB restatement and one material‑weakness finding tied to year‑end recording of bond liabilities. The board’s volunteer audit committee recommended Weaver as the external forensic auditor after an RFP; board asked staff to coordinate scope with the Auditor of Public Accounts before any contract.
The district’s external auditors, LBMC, presented a draft of the annual financial statements for the year ended June 30, 2025, to the Fayette County Board of Education on Nov. 24 and reported an unmodified (clean) opinion.
Katie Reed, LBMC senior manager, said the audit reflects two recently adopted Governmental Accounting Standards Board pronouncements (GASB 101 on compensated absences and GASB 102 on certain risk disclosures) and that implementation required a prior‑period restatement for compensated‑absence liabilities. LBMC reported a decrease in net position of roughly $12 million driven by a number of year‑specific adjustments and noted material year‑over‑year changes attributable to bond closings and the expiration of federal ESSER funding.
On internal controls the auditors said they had identified one material weakness: certain bond liabilities associated with year‑end bond issuances were not initially recorded because of nuances in fund accounting and how the district established the related funds in accounting software. LBMC recommended formal policies and procedures around bond closings and fund setup; management responded that adjustments have been made and described planned training and policy changes.
Because of community concern over financial controls and recent publicity, the board’s audit committee ran a separate RFP process to recommend an external review focused on the district’s budgeting and internal controls. Audit‑committee members said nine firms responded and the scoring rubric weighted technical approach, relevant experience, availability and cost. The committee reported Weaver scored highest by a narrow margin; other top contenders included local and regional audit firms. Committee members said RFP respondents indicated a typical engagement would run about three months and that many proposers said they would work alongside the state Auditor of Public Accounts (APA).
Board members raised two operational questions: whether the APA’s ongoing special examination would overlap the proposed external review and whether contracting now would duplicate APA work and require the district to pay for parallel efforts. Members asked staff to seek further clarification from the APA about scope and timing to avoid duplication before the board approves any contract. Board members also discussed budget impacts of paying for an external review from the general fund; the board did not award a contract on Nov. 24 and requested additional APA coordination and cost/scope clarification at the Dec. 8 meeting.
LBMC said it had added extra testing during the single‑audit work in response to public comment (including testing travel expenses) and reported no findings from that additional testing; LBMC emphasized its single‑audit work focuses on internal controls and compliance for federal programs and that decisions about appropriateness of particular expenditures may rest with the board and administrative policy.
