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Audit gives Elkin City Schools an unmodified opinion as fund balance falls; board approves budget resolution and class-size waiver
Summary
Auditors issued an unmodified opinion for FY24 but flagged a declining fund balance (unassigned general fund $308,000, about 1.82% of expenditures). The board approved the FY25 budget resolution and a DPI class-size waiver after reporting a district enrollment drop of 56 students.
Auditors reported Dec. 9 that Elkin City Schools received an unmodified opinion on its FY24 financial statements, but board members were cautioned about a shrinking fund balance that could cause cash-flow pressure.
April Bell, audit partner with Forbes and Mazars, told the board the district’s financial statements were “properly recorded in accordance with generally accepted accounting principles” and that there were no audit findings for financial reporting or the compliance audit of federal and state programs. “You did receive what we call an unmodified opinion this year with your audit,” Bell said.
Bell reviewed three years of revenue trends and said federal funding has declined as COVID-era support tapered, while state funding (the largest revenue source) rose only slightly. She reported the district’s unassigned general fund balance at June 30, 2024, was $308,000 — roughly 1.82% of governmental expenditures, equivalent to about seven days of operations — and warned that continued reliance on fund balance is not sustainable.
After the audit presentation, the board heard a budget review from Rachel Gracie and approved a fiscal-year budget resolution. Gracie outlined fund structures (state, local, federal, capital, child nutrition, other special revenue), noted benefit-cost pressures (retirement rate and hospitalization), and reiterated efforts to avoid dipping into the fund balance.
The board also approved a class-size waiver request to submit to the North Carolina Department of Public Instruction. Superintendent Dr. Steve Hall said the district lost 56 students between May and September 2024 (48 at the elementary), leaving first- and second-grade class-size averages above the state allotment (1st grade average 18.75 vs. limit 16; 2nd grade average 19.66). Hall recommended preparing the waiver now so the district can submit it when DPI’s temporary moratorium on processing such requests ends.
Board members emphasized fiscal discipline going forward. One member noted that ESSER (COVID) funds were largely spent and that using temporary funds to support ongoing positions is not sustainable. The district has not reported audit findings for 2024, Bell said.
Next procedural steps include posting the approved budget, preparing the class-size waiver for DPI submission, and continuing monitoring of expenditures to preserve or rebuild fund balance.
