Auditors warn Wayne Board of Education: rising health-care costs and 2% cap strain budget, referendum likely needed

Auditors gave the Wayne Board of Education a mixed report on Feb. 5, saying the district closed fiscal 2025 with an increase in fund balance but faces structural pressures that could require a bond referendum to address long‑deferred capital needs.

"You were up $2,900,000," the auditors reported, noting most of that amount was deposited into the capital reserve. The lead presenter said the district had about $3.8 million in its capital reserve as of June 30, 2025, and that the figures must be considered against the size of the district budget and New Jersey rules on excess surplus.

Why it matters: auditors warned that the state's 2% tax‑levy cap, accelerating salary and benefit increases — described at the meeting as roughly 3%–3.6% for many districts — and growing health‑care costs make it difficult to fund capital and maintenance from operations alone. Auditors said state debt‑service aid typically covers about 40% of eligible capital costs, but ineligible items (turf fields, certain projects) can reduce that share and complicate referendum planning.

Key findings and recommendations: the audit presentation highlighted several operational details and recommendations. Auditors said the food‑service fund had a net position of about $1.6 million and the extended‑day program ended the year with roughly $160,000. They flagged management report findings including journal entries and ledger adjustments tied to staff turnover and recommended clearer bank reconciliations and day‑to‑day cash controls. The auditors also emphasized follow‑up on preschool expansion financing and upcoming GASB standards changes.

Board exchanges: when Board member Mr. Pazakos asked whether state debt‑service aid has an expiration or change in Trenton, an auditor said the 40% aid estimate holds for eligible projects but warned that districts often need referendums to address roofs and other major capital needs when operating revenue is constrained. Auditors urged continued communication between the board and administration as budget planning for 2026–27 proceeds.

Examples from other districts: auditors cautioned about position‑control mismatches and one presenter cited a recent forensic comparison in which a $12 million difference emerged between a district’s position roster totals and its budgeted salaries, illustrating how personnel and accounting changes can create material gaps.

What happens next: auditors said they will continue to work with district administration, provide the final management report and track implementation of recommendations. The board did not vote on a capital referendum at the meeting; auditors recommended the district consider eligible projects that would maximize state aid and to maintain reserves for non‑eligible work.

","sections":{"lede":"Auditors gave the Wayne Board of Education a mixed report on Feb. 5, saying the district closed fiscal 2025 with an increase in fund balance but faces structural pressures that could require a bond referendum to address long‑deferred capital needs.","nut_graf":"Why it matters: auditors warned that the state's 2% tax‑levy cap, accelerating salary and benefit increases, and growing health‑care costs make it difficult to fund capital and maintenance from operations alone. Auditors said state debt‑service aid typically covers about 40% of eligible capital costs but that ineligible items can reduce that share.","ending":"Auditors said they will provide the final management report and continue to work with district administration. The board did not vote on a referendum at the meeting; any decision on a bond question would come later in the budget and facilities process."},