Superintendent flags possible overstated revenue in audit; board told levy may need adjustment

Superintendent Kim briefed the board on May 23 that the district’s annual audit has raised questions about how revenue and carryover balances were entered in prior years. Kim said auditors and the Educational Service District (ESD) are performing a forensic review and that preliminary work suggests some revenue may have been overstated in prior years; the ESD advised that the district not finalize its budget until audit questions are resolved.

Kim said the auditors are examining entries that may date back to fiscal 2021–22 and that the district may need to restate beginning balances. She described a process coordinated with the ESD and the district’s bond agents and said the auditors are trying to determine whether the issues rise to a finding or can be handled as a management recommendation. Kim said the auditors set a threshold for findings and that the district’s staff hope to limit the matter to management recommendations if possible.

The board also discussed bond-levy collection details. Kim explained that the district has been collecting less than the full levy amount approved by voters in earlier bond elections and that the bond agents and ESD have recommended returning to the full approved levy rate to avoid a future shortfall when large payments come due. Kim described the levy adjustment as potentially modest (board discussion mentioned an example of "about 10 cents") but emphasized the need for ESD and bond‑agent analysis; those parties were scheduled to appear for a detailed presentation on June 13.

On the budget timeline, the ESD advised the district to put a first read on June 27 and to adopt by July 25 (the district’s adoption schedule may extend into July) so auditors’ corrections can be incorporated. The superintendent said the district has tightened approvals and limited discretionary expenditures while the audit proceeds.

Board members asked about the size of the reconciliation Delta (the superintendent noted a $44,000 difference between two internal figures discussed at the meeting) and whether hiring timing could absorb the shortfall. Kim said a forthcoming staffing posting and the range of candidate experience could close the gap but promised the board would be kept informed.

No final levy action or formal budget vote occurred at the May 23 meeting; the board approved the consent agenda (which contained personnel items) and directed staff to continue working with the ESD and bond agents ahead of the June 13 presentation and the June/July budget schedule.