Tiffany Dawson presents 2025 audit: no fraud found; auditors flag budget, payroll and capital-asset issues

Tiffany Dawson presented the 2025 annual comprehensive financial report to the meeting and said auditors issued an unmodified opinion on the district's financial statements while identifying three findings that require management attention.

Dawson, the report presenter, told attendees that auditors "gave you an unmodified opinion on your financial statements," a clean opinion indicating the statements conform to generally accepted accounting principles. She also said, "We did not identify any fraud" in the financial statements.

The audit flagged three specific findings. First, Dawson said auditors identified a compliance issue with the state budget act where a revenue fund had expenditures in excess of the state’s 5% threshold, a matter the auditors characterized as noncompliance requiring corrective action. "We did have 1 instance of non compliance with respect to the budget law," Dawson said.

Second, auditors found a payroll‑withholding liability that was not properly reported at year end. Dawson described this as significant enough to warrant a recommendation that the district strengthen review procedures and double‑check payroll liabilities before closing the books.

Third, the audit found errors in capital‑asset schedules and classifications — for example, amounts that should be recorded as construction in progress were misclassified as buildings — driven largely by spreadsheet math errors and timing/communication problems between departments. Dawson recommended more frequent interdepartmental communication and earlier updates on project timing during the year to avoid year‑end backlog.

On accounting standards, Dawson explained that the implementation of a new Governmental Accounting Standards Board pronouncement (referred to in the presentation as GASB 101) expanded guidance on compensated absences, bringing PTO and other leave types into the recorded liability picture. She said a related review of leave‑conversion rules produced an adjustment of about $13,000,000 in the financial statements tied to how certain leave balances are converted for retirement pay.

Dawson highlighted two large actuarial estimates that materially affect the district’s full‑accrual results: an other‑postemployment‑benefit (OPEB) liability of about $254,000,000 and a net pension liability of about $245,000,000. She said those actuarial valuations and the assumptions behind them are a principal driver of the negative net position many districts report on a full‑accrual basis.

The auditors also noted a timing issue with required bond disclosures: because of audit timing, a required filing to the bond reporting panel occurred after the December 31 deadline, and auditors recommended tighter procedures and counsel coordination to ensure timely notifications for bond‑related events.

Dawson said auditors observed some departments using state signature stamps and recommended clear policies governing stamp use; she added management had already begun addressing the issue. She also reported that an internal personnel matter involving a former worker and a middle‑school secretary had been reported to the Legislative Auditor's Office and documented in the audit materials.

On high‑level numbers, Dawson said revenues were relatively stable year‑over‑year though several nonrecurring grants declined. She reported expenses decreased by about $18,500,000, which, combined with revenue and other movements, produced an improvement in the district’s position for the fiscal year of roughly $8,000,000.

In Q&A the Chair asked about signature stamps and whether the district attorney had been notified; Dawson said management is responsible for those notifications and confirmed the matter had been discussed with counsel and reported as appropriate. The Chair closed by thanking Dawson and staff for a thorough presentation; no formal action or vote was taken at the meeting.