District audit finds clean FY25 opinion; auditors highlight transfers tied to high school construction
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Summary
The district's fiscal 2025 audit received an unmodified (clean) opinion, with auditors reporting no material weaknesses; auditors said large transfers to capital and a $9 million bond issuance largely reflected high-school construction costs.
The Northern Lebanon School District received an unmodified (clean) audit opinion for fiscal year 2025, auditors told the board at its committee meeting on Feb. 3. Alex, the audit manager presenting the firm's report, said auditors found no significant deficiencies or material weaknesses in internal controls and issued a clean compliance opinion on the district's federal awards.
The auditors said they were on-site in October and November, issued final reports in January and filed the district's single-audit with the Federal Audit Clearing House. "We issued an unmodified or clean audit opinion for fiscal year 25, and there were no significant deficiencies or material weaknesses in internal controls," Alex said.
Auditors attributed most year-over-year changes to the district's high-school construction. The general fund decreased by about $3.9 million from the prior year, and capital-projects activity declined significantly; the presentation noted approximately $11.5 million was transferred from the general fund into capital and debt-service funds during the year, including about $5.5 million to debt service and roughly $6.0 million to capital projects. The capital fund also recorded a $9.0 million bond issuance to help fund construction costs.
The single-audit review covered federal programs because the district expended more than $750,000 in federal funds. The audit team said they examined Title I and IDEA during the compliance review and issued a clean opinion on federal-award compliance. Alex also noted a timing delay at the federal level: the Office of Management and Budget was late issuing 2025 grant guidance, which could affect future single-audit schedules but did not materially delay this year's report.
The auditors reported changes in long-term liabilities: pension liabilities were reported at roughly $43.7 million, down about $4.3 million from the prior year, and OPEB liabilities were about $4.3 million, a small increase. "The district made all required payments," Alex said.
Why it matters: the firm's clean opinion signals that the district's financial statements are presented fairly in accordance with applicable accounting bases and that its federal-award compliance controls were adequate for the programs audited. Board members asked clarifying questions after the presentation; auditors confirmed their work focused on higher-risk areas, reviewed contracts and minutes, and performed substantive procedures on invoices and other transactions.
The audit presentation closed after board questions and the district will circulate the audit slides and the auditor's report to trustees.
