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District audit clean opinion, but auditors report 55% certificated-salary shortfall
Summary
External auditors issued unmodified opinions on the district—inancial statements and federal/state awards but reported the district spent 51.08% on classroom teacher salaries versus a 55% threshold, producing an estimated $4.9 million questioned-cost effect; staff said a county waiver will be submitted and the board will be briefed on corrective tracking.
An external audit for El Rancho Unified found the district—inancial statements, federal awards and state-compliance areas free of material misstatement, but auditors flagged a statutory threshold shortfall tied to certificated teacher salaries.
Monique Panzo, supervisor at Christie White, told the board the audit team issued unmodified opinions for the 2023-24 financial statements and federal awards. She said auditors tested internal controls, state compliance and ESSER/GEER spending and found no material weaknesses in the audit testing. “We issued an unmodified opinion, which is the best audit opinion you can get,” she told the board.
But the auditors reported one finding: the district recorded 51.08% of expenditures on classroom teacher salaries in 2023-24, below the 55% minimum the state expects of unified school districts. Panzo said the difference produced a questioned-cost effect of approximately $4,900,000. She told the board this shortfall has been common among districts that used one-time COVID-era funds in ways that temporarily depressed the percentage of certificated-salary expenses.
District staff told the board they are preparing a waiver and exemption submission to the county office of education and will present the waiver to the board before filing. A district finance leader explained the waiver work includes backing out one-time COVID dollars and other non-certificated costs that can be exempted under statutory guidance.
Trustees asked about monitoring and corrective action. Staff said they can run labor reports and maintain a running total to track the certificated-salary percentage through the fiscal year and that some onetime federal grants (learning recovery emergency block grants) are being used only for services and supplies rather than certificated salaries so they would not increase the certificated percentage.
The board had no formal vote tied to the finding during the presentation; staff said they expected the waiver process and corrective monitoring to appear on a future board agenda.
