Audit finds no material financial deficiencies; auditor notes city owed about $13 million at fiscal year end

The Paterson Public School District's independent audit for the fiscal year ending June 30, 2025, found eight process or compliance findings but no material financial deficiencies, the auditor told the board on Feb. 4.

Business Administrator June Gray summarized the audit and said the district has initiated corrective actions on the findings; the issues were described as compliance-related items such as custodial account reconciliations, fixed-asset accounting, payroll timesheet documentation tied to federal grants, transportation contract addenda not filed correctly, student activity account records and application/count procedures for state aid. "While the audit does include eight findings, none are repeat findings, and none are material deficiencies in our financial records or in how transactions are reported," Gray said.

Steve, from Wilcox & Company, the independent auditor, told the board the most significant compliance item was a city-level shortfall in tax remittances. "At June 30, the city owed the school board over $13,000,000 of the school taxes," he said, a compliance finding because statute requires collection of tax money by the fiscal year-end. Auditor and administration described this as primarily a municipal, not district, compliance issue; Gray said the late tax receipts affected the district's cash flow and required use of short-term mechanisms to meet obligations until receipts arrived (she said the funds were received in September). The auditor emphasized that none of the findings affected the district's reported financial position.

Commissioners asked how often the district experiences late payments; Gray said tax remittances are due monthly and that delays impact the district's cash flow and timing for bill payments. Commissioners asked about steps to ensure timely receipt and whether the district would seek interest or other remedies; administrators said they send formal invoices and communications to municipal counterparts and copy the board when they do so. The board asked for follow-up context and implications for budgeting.

No formal votes were taken on the audit at the workshop; the auditors told the board that the district's corrective action plan will be presented at the next board meeting.