001Call the special meeting of the Utica City School District Board of Education to order. Can we all please stand for the Pledge of Allegiance? Pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Can the clerk call the roll, please? Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here.
002Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. Here. I'm Jacob Skevel with Bonadio Group. We're the external auditors for the district. We did meet with the audit committee last week to review the results of the audit and the drafts that are in place. I can run through briefly what was discussed in the summary of that in that meeting. So starting with the scope of the audit, a few different deliverables that we have drafts of. One is the audit of the financial statements, including our yellow book report. We do have a separate audit of the ECA activities, as well as the federal single audit for the district. So starting with
003that overall audit of the district's financial statements and our auditor's report, We anticipate issuing an unmodified opinion on the statements, a clean opinion that's the highest level of assurance that we can provide. So that's what you're hoping to see in the audit each year. We do remind you the financial statements belong to the district and management. Our responsibility as auditors is to give that opinion on the statements. A couple of required communications as part of the audit. First, related to the financial statements, nothing that we found in the audit that was unusual or lacked guidance. We do point out that the statements do contain estimates, largest being related to pension, liabilities, retiree health care, things of that nature. On the audit side, the only audit adjustments that we proposed during the course of our work
004related to the cash balances, specifically related to certificates of deposit and treasury investments, just to bring those up to fair market value at year end. So those were recorded by the district and are included in the financial statements. We did not have any further misstatements noted in the audit that were not adjusted by management. We didn't have any issues working with management to complete the audit. We do call out the timeline of the audit. The biggest one being the reason for the timeline and planning ahead for a special meeting. The thing outside of any of our control is New York State and the pension reports they provide that are needed to be included in the financial statements. This year, those weren't available until September 8th. So that's the point where we can do the work
005to complete the district's financial statements. As far as other items, the most significant other thing we were waiting on for the audit was capital asset information, which was received on September 9th. A couple brief highlights of the financial statements. First, on the statement of net position, that's the first statement you'll see if you go through the financial statement packet. In that statement, the district at year end has a deficit of $195 million. We like to point this out because that shouldn't cause concern. This is present in really all district financial statements across the state. And what really drives that deficit is the recording of the liability for retiree health care and the future actuarial valuation of those liabilities. So at year end those were 428 million. Could you kind of explain that in layman's terms?
006Yep. So I do like to compare to the pension. That's very similar. Actuaries are doing these estimates of how much future costs will come out for the next. forever run out of the district's current employees. And you'll see those valuations change by tens of millions of dollars each year because it's so susceptible to small changes in market performance and things like that. The one difference from the pension is the state pension system has investments and assets. So those at time are not a significant net liability to the district whereas the retiree health care there's not a mechanism to fund that in advance and keep investments for that so that's why every district has this and shows that big liability on the balance sheet each year okay thank you as far as the fund financial statements
007which are more relevant to the ongoing monitoring of governance and the district The general fund of the district increased about $9 million for the year end, and fund balance was at about $121 million. That includes all of the district's reserves and restricted fund balance, which were at about $106 million at year end. The district's unassigned fund balance this year did meet the state requirement of being at 4% of the district's budget. So the district was in compliance for that. Excellent. So as far as operations for the year and how we got to that $9 million increase, we do point out that actually was a more significant favorable variance to what was expected as the district anticipated using about $13 million of fund balance for the year. So that was appropriated fund balance for the 24-25
008year. So it would have been expected if all the budget numbers were matched exactly to have a $13 million decrease. But the final variances ended up being a $9 million increase to that fund balance for the year end. Okay. So that's it for the financial statements. As far as our other reports, we'll point out first is our report on internal controls over financial reporting. The scope of the audit is not to express an opinion on those financial controls, but we do gain an understanding of them in performing our audit and identify anything that raises to the level of a material weakness or significant deficiency in those controls. That being said, we did not have any such findings to report for this year. We did issue a separate management letter of opportunities for improvement in internal
009controls, which just contained one continued item for capital asset reconciliation to post these reports. On the single audit side, so that's the audit of the federal funds. Similarly, we give a report on compliance as well as internal controls over compliance with those federal awards. This year, our programs tested were the Education Stabilization Fund, so that's the ARP ESSER monies, and the Special Education Cluster, which is the 611, 619 grants you might know them by. In our report, we have no findings over compliance or on controls over compliance. We do point out the single audit reports we are on hold to issue in final form just as we await the federal government to issue its final compliance supplement. However, we were able to perform all the work based on the draft provided by the federal government.
010So just administrative on our end that we have to wait until that final version is issued before we can issue those in final form. However, that doesn't impact the district's financial statements or ECA statements. So those will be able to be issued and uploaded to NYSED to meet the 10-15 deadline. And on that topic of ECA, we just point out that those do have a separate financial statement on the cash basis that we do an audit of. And then same as the district's financial statements, we do have an unmodified or a clean opinion on those financial statements. So again, that's what you're looking to see each year. Any questions on any of those reports or financial information? So was this a market improvement over the prior years? Yep. I would say while we can't quantify
011everything along the way, our timeline as a whole was improved from prior years. Okay. Does anyone else have any questions? No, I don't have a question. I just have a statement. I just want to just give credence to the team. They worked very tirelessly and feverishly to ensure that the district would be in a sound financial position. A lot of meetings, a lot of energy went into this, and that's the side that the public doesn't see. Often working around mail hours, often working after hours. make sure that they're supporting the work of the district. This is another aspect of our wins as we have been continuing to build momentum. This builds on our Forbes list rating, only school district in New York State to have that distinction as being the best employer in the Forbes.
012And now you're also seeing the operational side get another big win. So I just want to tip my hat to you all publicly because I understand the work that goes into that. And I'd like to clap for my administrators if we could. Thank you. Does anyone else have any questions about it? Do we require a corrective action plan of any sort? Not for the financial statements to be issued. I believe New York State will ask for a corrective action plan related to management letter comments for the NYSED upload. Okay. Is there anything of significance in the management letter? No. Again, the one on the financial statement side was a carryover from the prior year. So I think that's still in progress and corrective action would be similar to the prior year. And then on the
013ECA side was minor documentation items. That is very common. Good. Okay. Anyone else? All right. Thank you. Thanks. Have a good evening, everyone. Okay, up next is the superintendent's report. So does anyone need any pages pulled, or are we good with it as it is? Yeah, I would honestly first make a motion to go into executive session and discuss personnel, legal opinions, those two items. Okay, I need a second. All in favor? Aye. Opposed? Motion carries. We're going to executive session. Do you want to just stay in the room or do you want to go in the other room?