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Auditor issues clean opinion for Topeka Public Schools and outlines option to waive GAAP reporting
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Summary
External auditors gave Topeka Public Schools an unmodified (clean) audit opinion for fiscal 2025 and described a district option to switch from full GAAP reporting to the state's regulatory basis to reduce reporting burden; the board asked about bond‑rating effects and next steps.
Kayla Williams, a principal with the audit firm formerly known as BT & Co., reported that Topeka Public Schools’ fiscal‑year 2025 financial statements received an unmodified opinion — the firm’s highest assurance level — and that the audit found no material misstatements. "These financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles," Williams told the board.
Why it matters: a clean audit affirms that the district’s controls and financial reporting met professional standards for the year, which matters to bondholders, vendors and state oversight. Williams also described an option the district is considering: waiving full GAAP reporting and instead presenting financials on the state’s regulatory basis to ease the administrative burden of GAAP disclosures.
Board members pressed staff on what the change would mean. "We met with our bond counsel and they didn’t think it would be material for our ratings in most cases," said the district finance representative, noting that raters could in rare edge cases change a unit’s score by a point. Williams told the board regulatory‑basis reports would be shorter and more closely aligned to budgetary (cash‑flow) reporting — reducing the size of the audit report from roughly 180 pages to about 70–80 pages — and that certain GAAP items (for example, depreciation expense and some actuarial pension computations) would no longer be recorded as annual expenses under the regulatory basis; they would instead be disclosed in footnotes where required.
What the board will do next: staff said adopting the regulatory basis would require an annual board resolution to waive GAAP and noted a modest transition workload in the first year. Finance staff said they plan to bring a resolution to the board at the next regular meeting for the fiscal year 25‑26 decision point.
Board members recommended care in weighing transparency and long‑term implications for debt and grant reporting. "Is there a benefit to continuing with GAAP, for instance Moody’s or other raters?" asked Doctor Schumacher. Finance staff and the auditor replied that, based on examples reviewed, rating models generally were not materially affected but cautioned about corner cases and the need for a formal decision process.
The board did not take action on the accounting basis at this meeting; the audit letter, the list of audit adjustments and the suggested next steps will be included in the packet for the next meeting.
