Omaha Public Schools board approves annual audit reports after auditors flag repeat material weaknesses

OMAHA — The Omaha Public Schools Board of Education voted 7-0 on April 6 to approve the annual audit reports for Douglas County School District 1 and Educational Service Unit 19 after auditors from Eide Bailly presented findings that included repeat material weaknesses and significant deficiencies.

Jamie Fay, an audit partner with Eide Bailly, told the board the firm issued an unmodified (clean) opinion on the district's financial statements and its federal single audit, but that the report still contained several important findings. "We did have some material weakness and significant deficiencies," Fay said during her presentation, citing problems in financial-statement preparation, correction of prior-period errors and oversight of audit support schedules.

The auditors also highlighted a significant change from new accounting guidance, GASB 101 for compensated absences, which increases how districts must accrue certain leave liabilities. Fay said that recalculating beginning balances under the new standard raised the district's liabilities by about $29,164,000 as of the start of fiscal 2025. "That recalculation increased that liability, which is a significant number," she said.

Presenters walked board members through summary figures shown on slides: roughly $1.5 billion in total assets, about $2.18 billion in total liabilities and a net position decrease reported around $481 million. Presenters cautioned that slide figures were displayed in thousands and discussed how actuarial assumptions and market factors can move pension and liability figures.

District Chief Financial Officer Shane Ryan acknowledged some findings were repeated from previous years and said staff have developed an action plan to review transactions, refine accrual processes and improve the year-end reporting that feeds the audit. "We have put together an action plan to review those individual transactions, and we'll be working on that over the next six months preparing statements for this year," Ryan said.

Jamie Fay and the audit team also noted a significant deficiency related to procurement-policy wording for federal awards; auditors did not find instances of improper vendor selection but said the district's procurement policy lacks some federally required language and should be updated.

Board members asked whether prior-year items had been fixed; auditors said they review prior findings each year and will report back if an item remains unresolved. The board's motion to approve the audit reports passed on a roll-call vote with seven ayes.

Next steps noted in the meeting record include district staff implementing the auditors' action plan and auditors revisiting the prior-year items during the next audit cycle. The board also approved a consent agenda earlier in the meeting that included a teacher contract and purchase of property for North High Stadium.

Action: Audit reports for Douglas County School District 1 and ESU 19 approved, roll call 7-0.