At a recent Kennett Consolidated School District finance committee meeting, independent auditors from Barbacane Thornton reported an unmodified (clean) opinion on the district's financial statements for the year ended June 30, 2025, but said the district's federal single-audit cannot be issued final until the U.S. Office of Management and Budget releases its annual compliance supplement.

Jeff Gowalczyk, an independent auditor with Barbacane Thornton, told the committee that "by regulation, we can't finalize and issue our federal audit until the federal government has put out the guidance," and said the firm expects no substantive changes but must await the OMB guidance to issue the single-audit formally.

The finding matters because final audit reports feed bond disclosure packages and other external filings. The auditors explained that, if required, the district could separate the federal single-audit from the financial-statement opinion, but doing so increases administrative and review costs.

Alex Frank, also with Barbacane Thornton, reported the firm's opinion: the financial-statement audit received a clean, unmodified opinion. Frank said the firm performed Title I testing under single-audit procedures and, as presented, had no findings for Title I.

Auditors described one material accounting presentation change required by governmental accounting standard GASB 101. The standard alters how compensated absences (sick and vacation accruals) are measured and reported. Rather than simply multiplying accrued hours by current pay rates, the district now must estimate multi-stage usage and payout patterns across employees' careers. That change produced an entity-wide restatement of the 2024 compensated-absence liability of about $1,500,000. District staff clarified that this is a full-accrual presentation change on the statement of net position and does not alter the district's general fund operating or budgetary cash flows.

The auditors and staff also reviewed other highlights from the report. The district's entity-wide net position grew by roughly $15 million; auditors tied much of that increase to construction activity for the two new elementary schools, reporting about $50 million of construction-in-progress recognized in fiscal 2025 and roughly $34.8 million of new bond debt issued to finance that work. For fiscal 2025 total revenues were reported at approximately $110 million, with property taxes comprising about $78 million (about 71% of revenues).

Instruction expense decreased roughly $9 million from 2024 to 2025, auditors said, primarily because of actuarial changes in retirement and OPEB reporting tied to the public pension system (PSERS). On the governmental fund side, the general fund balance declined by about $956,000; staff explained the decrease was driven by a planned transfer from the general fund into the capital projects/capital reserve fund to support ongoing construction needs.

District accounting staff and auditors encouraged board members and stakeholders to review the audited financial statements and accompanying notes, pointing to key pages that show fund balance, long-term liabilities and debt-service schedules. Auditors said they will notify the district when OMB issues the compliance supplement so the single-audit can be finalized; if OMB's guidance requires no substantive change, the numbers presented in the current report should stand.

Actions at the meeting included a procedural vote to approve the minutes from the previous meeting. A motion to approve the minutes was moved and seconded and carried with no recorded opposition or abstentions.

The auditors and district staff thanked one another for cooperation in providing supporting documentation throughout the audit process and said they will return to finalize remaining deliverables once federal guidance is published.