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Auditors report clean opinion but note restatement, building sale boosts fund balance
Summary
External auditors told the Kutztown Area School District board the 2024–25 financial statements carry an unmodified opinion but include a restatement tied to compensated‑absence accounting; a $1.58 million building sale and bond proceeds helped produce a year‑end surplus and an unassigned fund balance within policy limits.
Kutztown Area School District’s external auditors presented the district’s 2024–25 financial results and said they issued an unmodified (clean) opinion on the financial statements while a delayed federal compliance test will be reported separately in early 2026.
Nick Bieber, senior manager for the audit firm, told the school board that a change in how compensated absences were estimated produced a restatement: the general fund balance rose by about $87,000 and beginning net position on the government‑wide statements increased by roughly $226,000 because of revised management estimates. "The testing under the generally accepted auditing standards was an unmodified opinion," Bieber said.
Bieber said total general fund revenues were about $1.1 million (≈3%) over budget. Major components were a $475,000 Public School Facilities Improvement grant for the middle‑school HVAC project, about $159,000 in transportation subsidies, and roughly $109,000 in new charter school subsidies. On the expenditure side, general fund costs ran about $1.38 million over budget (3.7%), driven mainly by capital outlays tied to the HVAC project, additional debt‑service interest from a recent bond issuance, and up‑front recognition of lease/subscription liabilities for technology.
The auditors noted a $1.58 million net proceeds entry from a building sale: with that sale the district reported a small surplus for the year (just over $1 million); without it the general fund would have shown a deficit of about $555,000. Ending unassigned fund balance was reported at roughly $3,000,000, about 7.9% of budgeted expenditures for 2025–26 — within the district’s fund‑balance policy threshold.
Bieber also highlighted pressures in the food service fund (an adjusted net‑position decrease driven by higher contracted services and lower revenues) and recommended the district consider raising its capitalization threshold from $5,000 to $10,000 to match federal guidance. He said no material internal‑control weaknesses were identified. Superintendent (speaker listed as Superintendent) and board members thanked the auditors and the business office for the audit work.
The auditors said federal compliance testing under uniform guidance remains pending because the federal compliance supplement was issued late; that work is scheduled for completion in early 2026 and will produce a separate report.
The board accepted the audit presentation and will incorporate the audit findings and recommendations into upcoming budget and policy discussions.
