Auditor: Perryton ISD has healthy reserves, daycare program runs a $165,000 loss; no fraud found

PERRYTON 'Auditor (Speaker 2) presented Perryton ISD's annual audit at the board's Jan. 4 meeting, reporting a fund balance of $8,692,005.59, no detected fraud and an operating loss of $165,000 in the district's daycare program. The auditor said state and federal reviewers, including the Texas Education Agency, will be scrutinizing federal fund usage more closely in the coming months.

The auditor described the independent auditors' report as a clean or modified opinion and reviewed the district's revenue mix: state aid about 35.1% of revenue, property taxes about 38.5%, federal operating/grant funds about 15.9%, and investment earnings about 3.8%. On expenditures, instruction accounted for roughly 48.5% of spending (the auditor noted a 50% target for districts this size), co-curricular costs were about 7.6%, and general administration about 4.6%.

"Your fund balance is $8,692,005.59," the auditor said, adding that the Texas Education Agency expects a minimum three-month balance and that the board should aim to hold six months of reserves when building projects finish. He explained that the district's three-month minimum would be approximately $5,337,500 and a six-month target roughly $10,675,000.

On fraud and internal controls, the auditor said extra testing focused on high-risk areas such as activity funds and sponsorships. "We didn't find any fraud here this year," he said, adding that his team pulls extensive files and performs targeted testing to look for irregularities. He relayed an example of additional testing that uncovered an employee transaction pattern during fieldwork but said it did not amount to systemic fraud.

The auditor also flagged program-level results: the daycare program showed an operating deficit of $165,000 before transfers, which he described as common for district-run childcare services that are not intended to be profit centers. He recommended continued oversight of program finances.

He reviewed administrative items including depreciation and capitalization practice, cautioning against capitalizing small purchases. As an example he said that buying 10 chairs for $10,000 should not automatically be capitalized and depreciated under district policy and accounting guidance; the auditor said the district provides depreciation schedules that distinguish construction assets from routine purchases.

The auditor warned that new federal rules and automated TEA checks have changed filing deadlines and compliance expectations: districts should verify software readiness and monitor submission windows. He said auditors in Austin and federal reviewers will be increasing scrutiny of federal fund use during upcoming reviews.

District staff and board members thanked the auditor for the review. No formal motions or votes on audit acceptance or related policy changes were recorded during the presentation. The board then moved to student recognition and routine business.