Auditor issues clean opinion; staff say district falls about $5M short of state's 60% classroom calculation

An auditor from Eide Bailey told the board the district's 2024-25 financial statements received an unmodified ("clean") opinion and that the audit produced no findings or adjustments. "We issued a clean opinion on these financial statements," the auditor reported, and stated audit independence requirements had been met.

Trustees asked follow-up questions about compliance with the California Education Code's classroom-expenditure metric (often referred to as the 60% threshold or CEA form). Finance staff explained the district is "about $5,000,000 short of meeting that 60%" as the state currently defines the numerator and exclusions. Staff emphasized this is largely a definitional issue: many day-to-day, student-facing supports (counselors, psychologists, some special-education contracts, community-school specialists and certain MTSS costs) are not counted in the state's classroom-teacher-and-instructional-aide numerator, even though they are direct services to students.

Staff and auditors said the shortfall is not unique to Redwood City; a sizeable share of Bay Area districts also fall below the 60% threshold under current rules. Staff offered to provide detailed breakdowns to trustees and to quantify which expenditures, if reclassified or counted differently, would change the metric.

The board accepted the audit presentation as an information item; no audit-related action was required at this meeting.