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Auditor gives Southmoreland School District an unmodified opinion; board presses on bonds and pension liabilities
Summary
Turnley Robertson and Associates presented a clean 2024–25 audit, reporting a positive five‑year trend and an unmodified opinion. Board members pressed the auditor about pension liabilities, bond payment listings and a steep-looking interest figure; auditor explained GAAP reporting and bond-series detail.
Turnley Robertson and Associates delivered the Southmoreland School District's 2024–25 audit and issued an unmodified opinion on the district's financial statements.
"The audit has been finalized with an unmodified opinion for your financial statement audit," said Chris Robertson, partner at Turnley Robertson and Associates, summarizing the auditor's findings and the district's five‑year financial trends.
Robertson said the district increased its general fund balance by $1,400,000 over five years and reported healthy unassigned and assigned components. He told the board the district's federal major programs — including the National School Lunch Program, School Breakfast Program and Summer Feeding Program — were in compliance and that the single-audit testing produced no findings. "We had no internal control comments," Robertson said.
Board members sought clarification on presentation details that can make accrual-based statements appear counterintuitive. One board member pointed to the numbers in Exhibit A and asked why the assets and liabilities both read $69,535,865 "down to the penny," asking whether that meant the district's net position was zero. Robertson explained the statements were prepared on a GAAP full‑accrual basis and include long‑term pension liabilities allocated to the district by the statewide pension plan. "If you were to strip out the liability that you have absolutely no control over, you would have a significant, positive net position," Robertson said, adding that the negative net position shown is largely driven by the PSERS pension allocation and is not a current cash‑flow problem.
A board member raised a second concern about listed bond payments and a calculation that appeared to show $6,982,357 in principal with $1,700,000 in interest on two payments — an amount the member interpreted as about 24% interest. Robertson said the interest column aggregates multiple series and that the correct way to evaluate those amounts is to review each bond series and the official bond statements. He offered to provide the official bond statements that list interest rates by redemption period.
Robertson also reviewed revenue and expenditure trends: revenues exceeded budget by roughly $1,000,000 (state sources) and $800,000 (federal sources), while expenditures rose principally due to special‑education costs. He noted the food‑service fund position changed positively by about $137,000 and said net pension obligation figures changed largely because of actuarial assumptions, not immediate cash obligations.
On questions about the district's cash, Robertson said auditors used bank confirmations and audit procedures to verify the reported cash balances in the financial statements.
The auditor concluded by reiterating the clean opinion and offering to meet individually with board members and staff for further explanation of technical accounting items.
What happens next: the board accepted the audit presentation and will keep the audit packet on file; staff and auditors indicated follow‑up sessions are available for trustees who want deeper walkthroughs of accrual reporting and bond statements.
