Auditors give Benton Harbor Area Schools a clean opinion; board to vote on audit and payments next month

Joe Berlin of Gabbridge and Company told the Benton Harbor Area Schools Board that the independent audit of the district's 2024–25 financial statements resulted in an unmodified (clean) opinion. "In our opinion the financial statements present fairly in all material respects the financial position of the school district as of June 30, 2025," Berlin said during the audit presentation.

Berlin walked trustees through management's discussion and analysis, noting a $5.24 million increase in net position for the year and an unrestricted net position deficit of $2,176,235, driven largely by long-term pension obligations. He said the net pension liability improved from roughly $30.3 million at June 30, 2024, to about $24.1 million at June 30, 2025, a roughly $6 million improvement. Berlin also highlighted that total cash and investments rose to about $34 million and that the general fund ended with $24,975,15 (as presented in the report), representing roughly 46.5% of annual general-fund expenditures.

Berlin and board members discussed one-time items that affected year-to-year comparisons: the district recorded sizable operating grants and loan-forgiveness gains in fiscal 2024 that did not recur in fiscal 2025, and ESSER funding expired in September 2024, lowering operating grants in fiscal 2025. He also noted an emphasis-of-matter paragraph about implementing a new governmental accounting standard for compensated absences during the year.

Director Brock Carter summarized October financials for trustees and recommended that the board approve vendor payments totaling $1,185,921.29 (general fund $730,387.67; food service $172,626.70; student activity $282,930.95) at the board's next meeting. Carter said the general fund is at roughly 22% of the fiscal year to date and that the district's fund-balance ratio exceeds the state's recommended baseline. "We are at 75% right now," he said when asked about the recommended level.

Board members did not take a vote on the audit or payments at the meeting; staff said the formal votes to accept the audit and approve October payments will be scheduled for the next board meeting on Dec. 9. Staff also warned trustees that the Office of Management and Budget had not yet released the federal compliance supplement needed for the single-audit timing.

What happens next: The board is scheduled to vote on accepting the 2025 audit and to approve October payments at its next public meeting. The administration also advised trustees to expect a supplemental federal single-audit step after the Office of Management and Budget publishes the compliance supplement.