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District audit returns unmodified opinion; board urged to use monthly budget-to-actual reports as ESSER funds taper
Summary
Auditors issued an unmodified FY2025 opinion but reported expenditures outpaced revenues after COVID-era funds tapered off. Board members pressed for clearer monthly budget-to-actual reporting and more detail on special revenues and transfers.
Andrew Coleman, the auditor presenting the FY2025 audit, told the Newberry County School District board that the auditors "did issue an unmodified opinion," the strongest standard audit result, and that the district's financial statements were "materially correct." Coleman said delays in the federal compliance supplement and the South Carolina single-audit guide delayed final audit copies but the draft required for a Dec. 1 filing was submitted on time.
Coleman reported the district's general fund balance decreased slightly to $24,600,000 and showed an unassigned fund balance of $22,200,000, representing about 29 percent of actual expenditures. He said general fund revenues were about $67,600,000, roughly 5 percent higher than the prior year, while expenditures rose to about $75,400,000, a year-over-year increase of about 7 percent driven primarily by instruction and capital outlays.
Board members pressed the auditors on the apparent gap between revenues and expenditures. A board member (Speaker 1) said viewing the June 30 snapshot "sends a red flag to me that we're in trouble with budgeting," and asked how the board could use the audit as a decision-making tool. Coleman responded that the recurring transfer of approximately $5.2 million from the EIA (Education Improvement Act) fund into the general fund explains part of the difference and emphasized the board should focus on monthly budget-to-actual reports to track in-year changes rather than year-end snapshots.
Coleman also described a single-audit finding tied to food-service financial closeout adjustments; he said the adjustments were large enough to require reporting but were corrected in the financial statements. The auditors included one management-letter comment reminding continued monitoring of pupil activity funds where cash handling poses risk.
During discussion, Coleman identified a line item (IDA) at roughly $1,700,000 on page 153 of the audit and agreed to provide board members with more granular detail on specific accounts and carryovers. Board members asked for clearer monthly reporting formats that differentiate recurring from nonrecurring items so they can better assess budget sustainability now that ESSER stimulus funds have largely ended.
The board moved and approved acceptance of the audit and financial reports by voice vote.
