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CNUSD auditors issue unmodified opinions; board questions large pension/OPEB liabilities and accounting changes
Summary
External auditors gave Corona‑Norco Unified an unmodified opinion on both the 2025 district financial statements and the Measure GG bond audit, noting one reportable finding with no fiscal impact; trustees pressed auditors and staff about large pension and OPEB liabilities and a recent GASB accounting change.
Alexa Koch, the senior manager who led the district’s external audit for Ike Bailey, told the board the 2025 financial‑statement opinion for the Corona‑Norco Unified School District was unmodified — the highest level of assurance an auditor issues — and that the Measure GG bond audit also received an unmodified opinion.
"The opinion on the financial statements was unmodified," Koch said, and added that there was "one reportable finding" in the audit that carried no fiscal impact for the district. In federal and state compliance testing, Koch said, auditors found no reportable findings. The Measure GG performance audit sampled roughly 82% of expenditures and found those tested aligned with the voter‑approved projects and compliance requirements.
Board members asked about the district’s large reported pension and OPEB liabilities. Koch explained that actuarial assumptions drive those numbers and that small changes in the discount rate can materially affect the liability. "There's actually a page you can point to in the report ... a 1% change in the discount rate on your pension liability could change that amount from $378,000,000 to $673,000,000," she said, noting estimates are actuarial and sensitive to market and plan‑level results.
District staff clarified that pension discount rates and other actuarial inputs are determined by statewide plans (CalSTRS and CalPERS) and are not selected by the district. The board and staff also discussed an accounting‑standards change: a Governmental Accounting Standards Board requirement expanded the scope of compensated‑absence liabilities to include sick‑leave accruals for the 2024–25 year. Staff said that change required a retrospective restatement and explained a $53,000,000 beginning‑balance impact tied to the change in accounting principle.
Trustees raised a separate concern that the district has had corrected and uncorrected misstatements in recent years. District staff described the single audit finding presented as a timing and classification issue between two systems, with no fiscal impact, and said they have implemented additional staff training and are working to reconcile the two systems to reduce recurrence.
The auditor and district staff took questions from trustees and community members after the presentation. The report and the Measure GG audit will be available in the board packet and on the district’s website for public review.
The board did not take any formal action on the audits during the meeting beyond receiving the reports.
