Blackhawk School District audit delivers clean opinion as board confronts roughly $1.8 million shortfall

The Blackhawk School District received an "unmodified opinion" on its fiscal year 2022–23 audit, the auditor told the board at its May 9 meeting — even as district finance staff outlined a projected shortfall of roughly $1.8 million for 2024–25.

"We have issued this year what is kind of an unmodified opinion to the district," the auditor (Mr. Turley) said, meaning the audit found the district's financial statements conform with accounting rules. The auditor reported a general fund balance of about $6,461,000 and noted revenues increased by about $955,000 from the prior year, driven primarily by roughly $775,000 in state subsidies and $223,000 in federal subsidies.

Why it matters: an unmodified audit opinion signals that external reviewers found the district's accounting and disclosures to be free of reportable exceptions. At the same time, consolidated financial statements show a large negative net position — about $35 million — driven largely by the district's share of pension liabilities (reported as roughly $50,595,000), a common accounting result for school districts that record long-term pension obligations on consolidated statements.

Board finance staff and the district's finance presenter (Dr. Renata) framed the coming budget choices. The district projects an approximate $1.8 million shortfall for 2024–25 and outlined three broad approaches: stay at the current millage and cover part of the shortfall with fund balance, adopt some or all of the state Act 1 index to raise additional revenue, or choose a midpoint between those extremes.

"You have the index that you can choose to utilize at 5.1 and 7.1, which would levy about 942,000," Dr. Renata said while reviewing revenue-yield examples. She added the district will put a preliminary budget on public display for 20 days and target final adoption in June, giving the public time to review the proposed numbers before a vote.

The presentation included additional operational details: the general fund's unassigned balance equaled about 6.6% of the 2023–24 budget (below the Pennsylvania Department of Education threshold of 8% that affects millage-override authority), and general fund expenditures rose modestly (about $276,000). The finance presenter also flagged ongoing uncertainty about state-level funding streams such as Basic Education Fund (BEF) and special education adequacy, and noted reassessment impacts on local millage calculations.

Board members asked for additional rate comparisons on short-term investments and discussed timing for any levy action; several said a final millage decision is likely to come at the June meeting after the statutorily required display period.

What’s next: the board will post the full preliminary budget for public inspection, with a planned final vote in June. The district also signaled it will continue to explore targeted uses of federal grant dollars (ESSER) and expenditure management as ways to reduce the structural shortfall.

Provenance: Topic first discussed in the audit presentation and budget review (audit: SEG 543; budget/millage: SEG 866).