Anna Cardillion, audit manager with Eide Bailly, told the Hermosa Beach City School District board on Jan. 14 that the auditors issued unmodified opinions—commonly known as "clean" opinions—on both the district’s 2024–25 financial statements and the Measure S bond financial statements.

Cardillion said the auditors found one compliance issue in the district’s state compliance testing related to home-to-school transportation reporting, and a separate performance-audit finding tied to a Prop 51 project (the View modernization). "We were able to issue an unmodified opinion on the financial statements," Cardillion said. She added that the state compliance opinion was unmodified except for that single compliance area related to transportation reporting.

Why it matters: an unmodified opinion indicates the auditors did not identify material misstatements in the financial statements they tested, which is generally the most favorable audit outcome. The transportation reporting finding is a formal compliance exception that the district must address in its reporting process. Cardillion also described a performance-audit exception for a Prop 51 modernization project: auditors identified one ineligible expenditure that reduced reported eligible expenditures and produced a reported "savings" relative to the original state award.

Details: Cardillion said the auditors reviewed more than 80% of bond expenditures in the Measure S performance audit and reported no adjustments to the Measure S financial statements. For the Prop 51 view modernization project auditors identified one ineligible expenditure that, because of the way state matching and reporting are calculated, resulted in lower reported expenditures than the state’s award and therefore a state-level savings that the district will need to reconcile. Board discussion noted the state awarded approximately $16,000,000 for the project while the district reported roughly $15,800,000 in eligible expenditures; board members and staff said the district will work with the state office to resolve any reconciliation, and that collection or repayment would be handled through state processes.

Board reaction and next steps: board members asked clarifying questions about the transportation reporting item and the Prop 51 finding; auditors and staff described steps already taken to correct reporting system issues and said they expect compliance for the next year. Cardillion offered to answer questions and to walk board members through the audit report pages that summarize findings.

What the audit did not show: the auditors reported no other audit adjustments and no additional instances of noncompliance in the district financial statements or Measure S bond financial statements.

The board did not take formal action on the audit at the Jan. 14 meeting beyond receiving the presentation; staff will work with auditors and the state to address the identified compliance items.