Okemos audit returns clean opinion; auditors flag $1.7M planned use of fund balance and food-service comment

Auditors presenting to the Okemos Board of Education on Monday reported a clean, unmodified opinion on the district's financial statements and said the 2025'26 budget is structurally balanced as adopted. "I'm happy to report it's the clean or unmodified opinion, so the best opinion that the district can receive," auditor Steve Piesco said during the presentation.

The auditor walked trustees through the management discussion and analysis and identified several headline figures: roughly $70.26 million in general-fund revenue (about $50 million in state aid and just over $10 million in property taxes); slightly more than $72 million in general-fund expenditures; and a planned use of fund balance of about $1.7 million in the year that produced a pending fund balance near $9.225 million (about 12.8% of current-year expenditures). The auditor said the 2025'26 budget was adopted as balanced in the district's June budget.

On capital and debt, the auditor reported approximately $158.3 million in capital assets (net of depreciation) and roughly $93.3 million in long-term debt tied to those assets. He said that the district is paying down debt faster than assets are depreciating, a favorable profile for the district's finances.

The audit notes implementation of Governmental Accounting Standards Board Statement No. 101 (GASB 101) on compensated absences; the change produced an approximately $1,043,000 increase in accrued compensated absences recorded in long-term obligations. Piesco described the GASB adoption as affecting government-wide statements but not the district's cash flow or general-fund budgetary operations.

Auditors also reviewed federal compliance work. Because the district's federal expenditures exceed the single-audit threshold, the audit remains in draft pending national federal-audit guidance. The auditor said the draft is not expected to change materially and that the child nutrition cluster (about $1.0 million of the district's roughly $1.9 million federal expenditures) was audited with no findings.

Trustees asked for follow-up on management-letter items. Trustee Doxey requested a timeline for addressing the food-service fund comments; the superintendent and Director Kremko said scheduled on-site reviews and an upcoming purchase of kitchen equipment at Chippewa should resolve the comment and reduce the food-service fund balance. "We do have a plan for that," Superintendent Hood told the board, and committed to bringing an update in October.

What happens next: the audit will be finalized after federal single-audit guidance is issued; the district plans to present a response timeline on the management-letter items and monitor the food-service fund as equipment purchases are made.