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El Rancho audit gets unmodified opinion but flags classroom-salary compliance shortfall
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Summary
Independent auditors issued an unmodified opinion on El Rancho Unified—s 2024-25 financial statements but reported a state-compliance finding: the district reported 48.28% of spending on classroom teacher salaries against a 55% threshold, producing a roughly $9.3 million deficiency; the board heard corrective-action and enrollment-projection updates.
Monique Manzo of Christy White presented El Rancho Unified—s 2024-25 financial audit to trustees, reporting an unmodified (clean) opinion on the district—s financial statements, federal awards and state awards but identifying one state-compliance finding tied to the required 55% classroom-teacher-salary threshold.
"We issued unmodified opinions for the district's financial statements," Manzo said, adding that there were no material weaknesses or significant deficiencies in internal control. She then detailed the lone finding: "For fiscal year 24-25, only 48.28 percent was met, which ultimately resulted in a deficiency of about $9,300,000," she said, noting the figure reflected how one-time COVID-era funding skewed the salary percentage.
Manzo and district fiscal staff explained that a new accounting standard (GASB 101) also changed how compensated absences are reported, prompting restatements to beginning net position and fund balances. The auditors recommended district monitoring and, if appropriate, filing a waiver with the Los Angeles County Office of Education (LACOE).
Chief Business Officer GeoCondo Rodriguez Padilla said the district has a corrective-action plan that coordinates human resources and educational services to monitor the 55% compliance on a quarterly basis and report progress in budget and interim reports. "We will present information to you for the budget on where we are on that compliance piece," she said.
Trustees followed with procedural and substantive questions. Trustee Saavedra asked about waiver timing; auditors and staff said it would be worth checking with LACOE and that a 30-day window after publication may apply. Trustee Mejia praised the unmodified opinion but asked for additional detail on page 71 of the audit showing excess expenditures over appropriations; staff agreed to follow up.
The board later accepted the audit report by vote. The audit presentation preceded a second-interim report that put the district's 2024-25 enrollment at 6,878 (down from 7,985 in 2021) and projected a 25-26 deficit of roughly $7.5 million before a return to surplus in later years under the district's fiscal-stabilization plan. Fiscal staff said the plan relies heavily on managing staffing and benefits costs, position control, and targeted transfers and reserves.
"This is the last year of our deficit spending," GeoCondo Rodriguez Padilla told trustees, adding that the district expects to move to a positive operating result beginning in 2627 under current assumptions. Trustees asked for ongoing monitoring and additional quarterly updates as corrective actions are implemented.
No formal sanctions or reductions were enacted at the meeting; the board accepted the audit and received the second interim report.
