Auditors give Toms River Schools an unmodified opinion but warn fund balance is shrinking after large state aid cuts

Jerry Conedy, a partner at the auditing firm identified in the transcript, told the Toms River Regional Schools Board of Education the auditors would file the annual comprehensive fiscal report with the state on time and that they issued an "unmodified opinion" on the district's financial statements. "That is the best opinion that we can give," Conedy said, adding that the audit found no findings or recommendations on internal control, financial reporting or compliance.

Conedy said auditors found no single-audit findings for federal and state grant compliance but flagged a recurring regulatory item tied to the food service fund: because of large COVID-era federal inflows the district temporarily held more than three months of expenditures in cash, exceeding a Department of Agriculture limit. Conedy said a corrective plan is already in place that uses the funds for cafeteria equipment upgrades and reductions in meal pricing to draw the balance down over time.

A presenter from the audit team (listed in the transcript as the presenter) walked the board through year-over-year changes in revenue and expenditures. He said local property tax levy has increased steadily and that a one-time property sale accounted for roughly $4,162,000 of the miscellaneous revenue increase. Interest income rose by about $1.76 million (roughly a $900,000 increase from the prior year). Crucially, the presenter said state aid decreased by about $17.2 million and stabilization aid was reduced by about $4.6 million — changes that materially affected the district's fund balance.

The auditors reported the district ended the fiscal year with about $50.9 million (just under $51 million), a decrease of approximately $7.5 million from the prior year. They said the FY25 budget used more than $20 million of fund balance (about $12.6 million from reserves and another $9.4 million from unreserved funds), leaving limited miscellaneous reserves and a general fund balance that the auditors described as "dwindling." The auditor noted the district has relied on fund balance to stabilize operations in the face of state aid reductions and said the board should be mindful of that trend when preparing future budgets.

Board members asked few substantive follow-up questions during the audit presentation; one member reiterated that expenditures between the two years actually fell slightly. The audit team thanked district staff for their cooperation during the audit and said a few minor punch-list items remain before final issuance.

The audit report and the discussion make clear the district has a currently clean audit opinion but is operating with reduced reserves after significant state aid cuts. The board will move into its budget preparations for 2025–26 with a smaller cushion and with an outstanding regulatory plan to address the food service fund balance.