Auditor: clean audit for Little Egg Harbor Township schools, warns of $432,000 food-service surplus and $134,000 after‑school fund deficit

Mike Garcia of Ford Scott & Associates told the Little Egg Harbor Township Board of Education that the district received a clean audit for the fiscal year ending June 30, 2024, with no formal findings or required corrective actions. "I am happy to report that there are no findings or recommendations here, so it's a clean audit," Garcia said.

Garcia said the auditors offered two suggestions the board should act on. First, the food‑service fund ended with an "ending unrestricted net position" of about $1,187,900, which the auditor calculated exceeded the federal guidance minimum by roughly $432,000. "That means they're going to want you to spend down $432,000 by either purchasing equipment for your cafeterias, possibly other expenses maintaining the facilities of the cafeteria," Garcia said, noting federal rules strictly limit allowable uses to items tied to the child‑nutrition program.

Second, Garcia highlighted a $134,000 deficit in the community‑school (after‑school) fund that has accumulated over many years and will likely require a transfer from the general fund to zero the deficit. "Most likely, it will require a transfer from the general funds to cover that deficit," he said, and advised the board to treat closing the deficit as a multi‑year effort.

On the district's general fund, the auditor warned the board that the total fund balance fell by about $2.35 million year over year and that the unassigned fund balance ($403,624) is below the state cap threshold, leaving limited flexibility for the 2025–26 budget. "So that $4,194,057.77 — that's your fund balance of June 30 — and we reduced our fund balance by 2 and a half million dollars," Garcia told the board.

Board members asked follow‑up questions about what counts as an allowable food‑service purchase and how quickly the deficit must be eliminated. Garcia said allowable items commonly include kitchen equipment (ovens, dishwashers), certain utilities allocations and charges for staff who directly support the cafeteria program, but not general district expenses. He recommended the board develop a plan to spend the surplus on permissible items or risk federal recapture.

The board took the audit briefing under advisement and proceeded with routine agenda actions, approving multiple finance and personnel items by roll call vote. The auditor said the full audit report will exceed 100 pages and that the material presented summarized the most important fiscal items for the board to address.

Next steps: the board should formalize a plan to spend the food‑service surplus on allowable child‑nutrition expenditures and develop a timeline for addressing the community‑school fund deficit as part of 2025–26 budget planning.