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Auditor issues clean opinion but flags classroom salary compliance shortfall
Summary
The district received an unmodified (clean) audit opinion for fiscal year 2024–25, but the auditor reported a state compliance finding: classroom teacher salary spending fell short of the 50% requirement by about $1.3 million, which triggers 'question costs' and follow‑up reporting to the county and state.
Auditors presented the Los Gatos‑Saratoga Union High School District’s fiscal year 2024–25 audit and issued an unmodified (clean) opinion on the district’s financial statements while noting one state compliance finding.
Sheldon Chavon, presenting the audit, said the district’s financial statements were free of material misstatement and that there were no significant deficiencies or material weaknesses under generally accepted auditing standards. On state compliance testing, he reported the district fell short of California’s classroom teacher salary requirement: the district reported current expense of education at about $75.5 million but needed to reach roughly $76.8 million to meet the 50% threshold — a shortfall of approximately $1.3 million. That shortfall is recorded as 'question costs' and will require follow‑up with the county office and state to explain and resolve the discrepancy.
Chavon also reported that the district met and exceeded statutory reserve requirements (available reserves about 11% as of June 30, 2025), discussed pension and OPEB liability trends, and noted average daily attendance declines from 3,071 (June 2023) to 2,908 (June 2025) with a projection to 2,881 in 2026.
Board members moved to approve the audit report; the motion passed by voice vote. The auditor emphasized that the single compliance finding does not affect the auditor's clean opinion on the financial statements but does require administrative follow up for state reporting.
Next steps: the district will work with the county office to address the compliance finding and resolve the reported question costs.
