Board accepts 2024-25 financial audit; staff to seek OCDE waiver for teacher-salary requirement
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Summary
The board accepted the district's audited financial statements for 2024-25. The auditor reported three state compliance findings, including instructional-materials hearing timing, a shortened learning-opportunities program, and a classroom-teacher-salary spending percentage below the 55% threshold; staff said they will seek a waiver from the Orange County Department of Education to avoid funding withholdings.
The Newport-Mesa Unified School District board voted to accept the district's 2024-25 financial audit after an auditor described the scope of testing and identified three state compliance findings.
Natalie Palma of Christie Wood Associates, who helped conduct the audit, told trustees the auditors' financial-statement, state-compliance and federal-compliance opinions "were all in modified, which is the best opinion that you can receive," and then reviewed the findings.
Palma said auditors found: (1) the required public hearing on instructional materials was held after the eighth-week deadline set by Education Code; (2) the district's learning-opportunities program ran about 20 of the 30 days required by Ed. Code; and (3) the district did not meet the required percentage of current-expense-of-education spending on classroom teacher salaries (the 55% target for unified districts).
District staff said they have discussed the teacher-salary finding with the Orange County Department of Education and will apply for a waiver to avoid funding withholdings. "With the waiver, yeah, it won't be [withheld]," Palma said in response to trustees' questions; district staff clarified that the concern is a potential withholding of funding, not a cash fine.
Trustees asked clarifying questions about the classroom-salary calculation and one-time funding that affected the percentage. The auditor noted that some one-time COVID-era funds and technology purchases can skew the percentage and that accounting and natural spending changes are expected to rebalance the ratio over time.
After discussion, the board voted to accept the audit report as presented.
The audit presentation included single-audit testing of Title I and special-education programs and a review of June 30 balance-sheet accounts. District staff said the formal 59-page midyear report and audit materials will be posted for public review.
