Preliminary audit flags $12–15M revenue shortfall; revised budget deferred pending auditor reconciliation
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Summary
Finance staff told the committee they will not present a revised budget until external auditor EisnerAmper finishes work; preliminary findings indicate $12–15 million in revenue shortfalls (Avalon-related receipts, sales tax and federal grants), and staff recommended reconciling figures and possibly scheduling a special meeting to consider corrective steps.
Finance staff told the committee that a revised FY26 budget is not ready for approval and that preliminary work with EisnerAmper indicates the district is likely below original revenue estimates by roughly $12–15 million.
The finance director said the external audit firm’s initial summary suggests Avalon-related receipts and sales tax collections are lower than budgeted and federal program revenue may be about $2 million below budget. ‘‘Once we have the full report, we’ll bring back a revised budget,’’ the finance director said, adding that the district may need to call a special board meeting or present a revised budget at the March board meeting.
Audit partner John Murray of LaPorte presented the comprehensive financial report and said auditors issued an unmodified (clean) opinion on the financial statements and on major federal programs. The audit noted a decrease in general-fund balance due to transfers to the capital construction fund and identified a small number of procedural exceptions in statewide agreed-upon procedures (bank reconciliations and timely deposit of some receipts), but no single-audit findings.
Board members asked for clarity about projection methods and stressed the need for a documented budgeting process (SOP) and historical baselines to avoid overprojection. Finance staff and the superintendent said they would coordinate to produce a documented approach and bring reconciled numbers back to the board before any final budget vote.
Next steps: Finance will reconcile internal numbers with EisnerAmper’s report, prepare a revised budget for board review and recommend whether to call a special meeting or present the revision in March.
