Auditor: Delaware Valley SD posts clean 2024–25 audit, modest surplus and transfers to capital reserve

Paul Murphy, a CPA and partner at Murphy Doherty and Company, told the Delaware Valley School District board during a work session that his firm's audit of the 2024–25 fiscal year yielded an unmodified opinion — commonly described as a "clean" audit — and found no reportable findings.

"The opinion letter is what's called an unmodified opinion ... also nicknamed a clean opinion," Murphy said, noting the district's required financial statements conform with generally accepted accounting principles (GAAP).

The auditor directed board members to the budget-to-actual schedule on page 60 of the report and highlighted a revenue positive variance of $809,008.98 (final budget $97,747,382; actual revenue $98,557,280). He also reported total expenditures of $96,563,006.27, a favorable variance of $1,183,755 compared with the final budget.

Murphy said the board approved transfers totaling $3,591,007.55 into the capital reserve — funds the auditor described as surpluses from the 2023–24 year — and explained the timing of that approval reduced the general fund balance shown in the report. He reported the general fund's ending balance (third column on page 60) as $18,791,633 and pointed trustees to page 20 for the fund-breakdown and committed items.

Among the commitments cited on the fund breakdown, Murphy listed a PCS rate adjustment of $6,620,008.12, compensated absences of $2,341,002.42 and OPEB-related GASB 75 commitments near $9,700,000. He also reviewed the capital projects fund, saying that after spending about $2,542,009.73 on projects (roof upgrades, a high-school scoreboard, security upgrades and similar work) the fund ended the year at about $10,192,008.94.

Murphy warned of the district's share of statewide pension underfunding. He cited required payments in 2025 of $14,996,370 plus $283,009.71 (totaling about $15,280,341) and said that equates to roughly 33.9% of eligible payroll for retirement-related wages. "So every dollar of payroll that's eligible for [retirement], you're gonna have to put away 33.9¢," he said, noting rates have climbed substantially since 2012.

The auditor described food service as moving toward break-even after pandemic-era fluctuations. The district's cafeteria fund showed a positive net position; Murphy noted, "So you are at $659,010.27" and cautioned that state and federal program rules limit straightforward transfers of that money back to the general fund.

Board members and staff asked questions about using cafeteria cash for general operations, equipment replacement and how one-time items or federal grants affected recent balances. Murphy said moving cafeteria money to the general fund is "difficult" and pointed to program rules and reporting constraints; he described operational steps the district uses to reimburse the general fund (for example, charging custodial time to cafeterias) to improve the fund's position.

Murphy characterized the district's overall fiscal position for 2024–25 as strong: he said the general fund grew by about $1.9 million before transfers, food service improved by about $211,000, the capital projects fund grew by about $1.4 million, and roughly $2.5 million was spent on facility improvements in the year under review. He confirmed that the audit contains no findings.

The board will take formal action on the audit report at its upcoming Thursday meeting, when trustees are expected to consider acceptance of the auditor's report.