The Audit Committee of the Vermont State Colleges Board of Trustees voted to accept the draft FY2025 audited financial statements after a presentation from auditors Witham, Smith and Brown, who reported an unmodified opinion and no internal-control findings. The committee also noted the uniform guidance single audit remains incomplete because the Office of Management and Budget’s 2025 compliance supplement has not been finalized.

Zach LaFlaiche, a partner with Witham, Smith and Brown, told trustees, “we're issuing an unmodified audit report, an opinion for the 2025 year. That is a clean report.” He said the auditors found no significant deficiencies or material weaknesses in internal control and that any adjustments had been discussed with management prior to posting.

LaFlaiche explained that the firm completed substantive testing for the single audit but cannot issue a final single-audit opinion while the OMB compliance supplement remains in draft form. “We simply cannot state that the audit is complete until the compliance supplement is completed,” he said. Auditors reported no findings from the single-audit testing performed to date.

The draft financial statements showed a year-end net position increase to about $75 million from roughly $47 million the prior year. Auditors cited three primary drivers: increases in cash and cash equivalents (about $6.8 million), higher long-term investment values (about $6.4 million), and decreases in OPEB (other post-employment benefits) deferred outflows and liabilities. Operating revenue rose, driven in part by federal grants and a revised Pell award calculation; operating expenses decreased, producing a smaller operating loss than the prior year.

LaFlaiche noted one material transaction not yet recognized in FY25: a subscription-based IT arrangement (Workday) that, once placed in service, will generate a right-of-use liability and corresponding software asset. He estimated a gross project cost near $20,000,000; recognition will occur when the arrangement is in service and therefore is expected to affect FY26 statements.

Committee members asked whether the audit committee could recommend the statements to the full board despite the outstanding single audit; the auditors said the committee may recommend approval of the financial statements while the single audit is finalized and that the single-audit report will be presented separately once the OMB supplement is released.

The committee moved and seconded resolution 2025-010, “Acceptance of the FY ’25 audited financial statements,” and approved it by voice vote. Trustees thanked staff — including Sharon and Toby — and the audit team for producing a clean report.

Notes: the single-audit submission to the federal Audit Clearinghouse is contingent on release of the 2025 OMB compliance supplement; auditors indicated they completed testing and will finalize the single audit when the supplement is final.