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Audit finds ESSER reporting problems; district accepts FY24 audit and fields board questions
Summary
Auditors reported a modified opinion on Easton Area School District's fiscal 2024 statements and an adverse compliance opinion on ESSER reporting; the board accepted the audit and challenged the causes of delays, consultant costs and whether federal recoveries are likely.
Jeff Weiss, the auditor who led Easton Area School District's fiscal 2024 audit, told the board the financial statements carry a modified opinion and that his team issued an adverse compliance opinion for one federal program, related to ESSER reporting. "We are expressing a modified opinion on the financial statements," Weiss said, and added that the ESSER program reporting "did not reconcile" to supporting documentation, prompting the adverse finding.
The audit presentation, introduced by CFO Jack Trent, also flagged repeated material weaknesses in bank reconciliations, grant reporting tied to ESSER, and the timeliness of financial reporting. Weiss told the board the district's government-wide net position showed an $82,000,000 deficit, driven largely by pension and other post-employment benefit liabilities. He gave general fund totals for fiscal 2024: roughly $211,800,000 in revenues and $219,600,000 in expenditures, producing a general-fund deficit for the year.
Why this matters: the audit's compliance finding on ESSER (Elementary and Secondary School Emergency Relief) signals that federal grant reporting did not match the district's documentation. That raises the risk of additional oversight and complicates budgeting and planning at a time when the board is voting on a new budget. Trustee Mike Simonetta pressed Weiss on whether federal authorities have sought repayments in similar cases. "Have you experienced this? And has the feds come in and asked for money back?" Simonetta asked. Weiss replied, "I have not seen that in... for the ESSER program... We have not seen them come back and ask for any of that money back."
Simonetta and other board members also questioned the timing of the audit. Weiss said the audit was delayed because auditable financial information was not initially available and that the district brought in an outside consulting firm to get records into an auditable format. CFO Jack Trent confirmed the district received invoices upon completion (an invoice dated May 15 was referenced), and board members asked staff to itemize consulting and legal costs associated with getting the records ready for audit.
Weiss walked the board through other headline figures in the report: a $225,000,000 net liability tied to the pension plan disclosed in note 8; other post-employment benefit liabilities related to PCERS and a single-employer plan; capital assets additions and depreciation, and the district's long-term debt. He noted the single-audit test of major federal programs found Title I had an unmodified opinion, while ESSER received the adverse compliance opinion.
The board voted to accept the fiscal 2023'/24 audit report as presented. Trustees also asked administration to provide follow-up detail on the specific ESSER reporting issues, the timeline for corrective action, and the dollar amounts tied to consultant and attorney costs that helped prepare the auditable records.
What comes next: the district will provide the board with a more detailed reconciliation of ESSER-related expenditures and the consultant invoices, per board requests. The audit will be part of the public record that informs budget and debt discussions in coming meetings.
