York Suburban audit returns clean opinions; new accounting rule lifts reported compensated-absence liability to about $5.9 million

External auditors for York Suburban School District reported clean opinions on both the district's financial statements and federal program compliance for the year ended June 30, 2025, but cautioned the board the district's entity-wide liabilities rose after a new accounting requirement.

Jeffrey Kowalczyk, an outside auditor with Barbee Thornton and Company, told trustees the audit found the financial statements "fairly present the district, in all material respects, in accordance with generally accepted accounting standards." He said the federally required compliance work for the child nutrition cluster (National School Lunch and School Breakfast programs) likewise had no reportable exceptions.

Kowalczyk said a recent change in accounting standards requires districts to recognize additional compensated-absence obligations (sick and vacation time) on entity-wide statements. "Your district's compensated absences increased to about $5,900,000 on that entity-wide basis," he said, characterizing the change as a reporting effect rather than an immediate cash outlay.

The auditor summarized operating results: budgeted use of fund balance was expected, but revenue outperformed estimates as state revenues exceeded projections, producing roughly $74 million in revenues against about $66.9 million in expenditures. That resulted in a modest increase to the fund balance on a budgetary basis while governmental funds overall saw a roughly $2 million decrease after capital and debt activity.

Kowalczyk also called out two standard audit risks the team considers in every engagement: management override of internal controls and revenue-recognition risk. He emphasized that these are professional standards the audit must assess rather than findings of misconduct. "We did not identify any material weaknesses, significant deficiencies, or other conditions to bring to the board," he said.

Trustees asked whether cyber-charter tuition costs are straining the district's finances; Kowalczyk and district staff said the management discussion and analysis notes raised the issue as a management observation. The auditor said many districts have seen increased charter tuition costs and that York Suburban has been affected as well.

The board was told the audit will be presented for formal approval at the next board meeting. Administration and the auditor said they would make themselves available for follow-up questions before that vote.

The board's Chief Financial and Operations Officer introduced Kowalczyk and described two non-operational journal entries recommended during the audit (depreciation and a food-service adjustment) and the implementation of the new compensated-absence accounting requirement.