Auditor gives Woodford County Schools a clean opinion, flags accounting shifts and fund deficits

The Woodford County Board of Education voted unanimously Nov. 17 to approve a draft audit showing a clean opinion on the district's financial statements, while the district's auditor warned that new accounting rules and some fund balances warrant attention.

—We issued an unmodified opinion, which is a clean report,— the auditor, Mr. Sparks, told the board, adding that the firm found no evidence of fraud. He said the primary drivers in the year-to-year statements were a large construction fund and new accounting guidance that changed how liabilities such as compensated absences and OPEB/pension obligations are recognized.

Why it matters: The auditor highlighted that GASB-driven changes (notably the implementation noted as a change in accounting principle) increased reported liabilities and pushed some enterprise-style funds into deficit on an accounting basis even where cash positions may differ. The audit shows a negative total net position of about $378,000 and a large construction-in-progress figure tied to the new high school project; the audit also reports an ending bond balance around $78,000,000 associated with that construction activity.

Key findings and clarifications: Sparks walked the board through a set of procedural items and two board-level concerns. One state-level finding noted that the district did not publish the annual financial statement or budget in the local newspaper, a KDE requirement. The auditors also flagged instances where purchase orders were issued after invoices and payroll testing where some certified employees had been paid for hours outside their contracted schedule because the single salary schedule had not been updated; the schedule has since been updated.

Sparks said some deficits—most notably in the food service and daycare funds—reflect the required recognition of long-term pension and OPEB liabilities under the new accounting standard rather than an immediate cash shortfall, though he also said that certain funds did operate at a real deficit related to wages and benefits. On student activity funds, the firm found no deficit sponsor balances.

Board response and next steps: Board members asked for clarity on the variances between budgeted and actual revenues and expenditures, and on the timing of federal guidance on OMB compliance testing. Sparks said the draft will be finalized once the federal compliance supplement is formally published; he estimated it could be January before any final federal changes are issued. The board agreed to approve the draft now and revisit the final audit if anything changes.

Outcome: The board approved the draft audit pending any final federal updates (motion approved 5–0). The auditor invited further questions by email and said the firm would correct minor typographical items before issuing the final report.

What to watch: The board and administration plan further budget discussions with the budget committee and a January work session to go deeper into the financial reports and the district's plan to rebuild reserves and manage the construction fund as the new high school project closes out.