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Auditors issue clean FY23 opinion for Masconomet, warn of $61.4 million OPEB liability and recommend risk assessments
Summary
Markham LLP issued an unmodified opinion on Masconomet's FY23 financial statements, noting a healthy certified E&D of $2.1 million but flagging a $61.4 million OPEB liability and recommending fraud- and cybersecurity-risk assessments in the management letter.
Markham LLP engagement partner Frank Sireddy told the Masconomet Regional School Committee that auditors issued an unmodified (clean) opinion on the district’s FY23 financial statements and found no internal-control deficiencies.
Sireddy said the district’s total fund balance was about $4.4 million, of which $964,000 was committed to the stabilization fund and $2.1 million was unassigned and certified as excess and deficiency (E&D), roughly 5% of the budget. "We were able to issue an unmodified opinion," Sireddy said, calling that "the best we can get." He described the budget process as structurally sound and said revenues and expenditures were favorable overall.
The auditor cautioned the committee about the district’s other-postemployment-benefit (OPEB) liability, which he put at approximately $61,400,000 and reported had increased by about $1.8 million during the year. "You have a long way to go to get to that because of the $61,400,000 liability," Sireddy said, noting the district had funded less than 1% of that liability (about 0.83%). He explained that small changes in the discount rate materially affect the liability and pointed the committee to a sensitivity analysis in the footnotes showing the impact of a 1% change in the discount rate.
On federal awards, Sireddy said the district’s federal expenditures (driven by ESSER grants) exceeded the single-audit threshold this year — "you're at 1,600,000.0" — and that the compliance audit for ESSER was a clean report with no findings, questioned costs, or internal-control deficiencies. He also said the federal threshold will increase to $1,000,000 in 2025, which may lessen future single-audit exposure.
The management letter included two recurring recommendations: conduct a fraud-risk assessment and perform a cybersecurity-risk assessment. Sireddy said many districts hire outside consultants for these reviews; committee members and administration agreed to seek third-party quotes and discuss funding during the next budget cycle.
The audit and management letter were posted on the district website and accepted by the committee as presented.
