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Auditor reports $39.26 million year-end surplus but flags controls, purchase-order errors and fund misclassifications
Summary
External auditors gave the Plainfield district an unmodified opinion but highlighted five recommendations: insufficient secretary bond coverage (corrected after year end), ESIP bond misclassification, reclassification of BPU federal grants, purchase-order control weaknesses (14 errors in a 41-item sample), and incomplete capital-asset detail; auditors warned the district used $8.3 million of fund balance for the current budget.
External auditors told the Plainfield Board of Education that the district's 2024–25 financial statements received an unmodified opinion but the audit contains five management recommendations, and that the district used a sizeable portion of reserves to balance the current budget.
Gary Higgins of PKF O'Connor Davies summarized the auditors' independent opinion and said the year-end surplus was $39,260,000. He detailed components of that surplus: approximately $6,500,000 in capital reserve funds, $1,500,000 in maintenance reserve, $1,200,000 for unemployment reserve, and about $12,500,000 in encumbrances. Higgins said the district authorized using roughly $8,300,000 of prior fund balance to offset taxation in the current operating budget and that the unassigned fund balance is approximately $9,264,000.
Higgins listed five recommendations in the auditor's management report: (1) maintain adequate security bond coverage for the board secretary (the audit notes coverage was adjusted to comply with statute effective 07/01/2025), (2) properly classify energy savings obligation bond (ESIP) transactions in the general fund rather than the debt service fund, (3) reclassify certain BPU federal grants from the general fund into the special revenue/grant fund, (4) ensure purchase orders are created and approved prior to receipt of goods or services, and (5) update the detailed capital-asset report to reflect recorded transactions and depreciation.
Commissioners pressed the auditors about the purchase-order finding. Higgins said auditors tested a sample of 41 purchase-order transactions and identified 14 instances where goods or services were received before the district had encumbered the purchase order, a pattern the auditors said was more than isolated instances. The audit team said no corrective-action documentation for those specific samples had been presented to auditors during fieldwork.
Higgins explained the practical budget implication of using fund balance: replacing the $8.3 million used in the current year would require additional revenue (tax levy) or expense reductions in the FY26–27 budget if alternative revenues are not available. He also described a drawdown and a prior-period adjustment that left the capital reserve at about $6,500,000 and maintenance reserve at $1,500,000.
During public comment, Azim Gray urged that the audit be referred to the New Jersey Auditor General, arguing the findings show misalignment of funds and weak internal controls. Miranda Brown, another commenter, urged preserving programs that have produced student gains while cautioning about the $8.3 million gap.
A motion by a commissioner to open public questioning of the auditors while they were present failed on a roll call and the board did not allow a separate public Q&A of the audit team at that point. The auditor offered to be contacted after the meeting for follow-up.
The audit and its management recommendations will be part of finance and administrative follow-up as the district develops the FY26–27 budget.
