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District audit: clean opinion but repeated weaknesses in controls and budgeting
Summary
Auditor gave Edgecomb Public Schools an unmodified (clean) opinion for the fiscal year ended June 30, 2025, but reported multiple repeat material weaknesses and significant deficiencies including untimely bank reconciliations, budget violations, credit-card documentation gaps, and a large fund-transfer issue.
The district's independent auditor told the Edgecomb County Board of Education that the June 30, 2025 financial statements received an unmodified opinion, but warned the board of repeated control weaknesses and several significant accounting problems the audit uncovered.
Shannon Dennison, presenting the audit, said the firm issued a clean (unmodified) opinion on the district's financial statements but identified multiple material weaknesses and significant deficiencies. Key findings included bank reconciliations that were not completed on a timely monthly basis, budget violations that resulted in expenditures exceeding allocated budgets, inconsistent purchase‑order and pre‑audit practices, and weaknesses in credit‑card expense documentation that required nearly $50,000 of post‑year adjustments.
Dennison also reported an internal transfer issue: as of June 30, 2025, the local district's bank account had an amount approaching $4.1 million that needed to be transferred to the state account tied to those state-funded expenditures. The audit team described that transfer as a repeat finding and one that had grown since the prior year.
Other items on the auditors' list included a $432,000 correction tied to the June 30, 2024 reconciliations, purchase‑order controls, leave‑balance adjustments for departed employees, and a $314,000 overcharge to the child nutrition program that the district had already recorded and is addressing. The auditors noted some of these were repeat findings from the 2024 audit.
On fund balances the audit presentation cited a general fund ending balance of $389,486 and an unassigned general-fund balance of $148,179; auditors cautioned the board to monitor fund balances and recommended monthly reconciliations and stricter pre‑audit budget controls.
Board members pressed auditors and staff about why the issues repeated. A board member said the findings were "frustrating" and asked for a plan to prevent recurrence. Dennison and district staff said outside financial consultants had been engaged, the audit firm had already begun work on the 2026 audit, and district leaders said processes were being put in place this year to address the findings, with auditors returning in the fall to complete the work.
What this means: the clean opinion indicates the audited financial statements are materially correct for the period reported, but the control weaknesses and repeat findings increase risk and require board oversight and prompt corrective actions to reduce future errors and potential fiscal exposure.
