Council accepts FY 2023–24 audit; city posts healthy reserves and improved pension funding

The Fair Oaks Ranch City Council on March 20 accepted the fiscal year 2023–24 annual audit and comprehensive annual financial report prepared by Brooks, Watson & Company.

Summer Fleming, the city's director of finance, introduced the report. Auditor John Watson presented highlights, telling council the firm issued an unmodified opinion — the highest level of assurance under generally accepted auditing standards — and that governmental funds reported a combined ending fund balance of about $14.9 million, an increase of roughly $3.8 million for the year. Watson said total assets exceeded total liabilities by about $40 million and overall net position increased by about $3.1 million. He reported the city’s unassigned fund balance and six‑month operating reserve totaled roughly $7.2 million, about 76% of general fund annual expenditures, equating to about nine months of reserve.

Watson said the city’s net pension liability decreased to about $1.53 million (from about $2.12 million the prior year), principally because investment returns on pension assets exceeded actuarial assumptions; the report shows the pension was about 90% funded at year end, above the nationwide average cited in the audit. Watson said there were very few audit adjustments and that the transition to the new audit firm proceeded smoothly.

Council members and the audit committee praised the finance department’s work. With a motion and second on the record, council voted to accept the audit. Staff noted the city submitted a Popular Annual Financial Report and the city expects to submit the CAFR for the GFOA Certificate of Achievement for Excellence in Financial Reporting.

Outcome: audit accepted; staff to publish the audited financial report and continue required reporting and follow-up as noted in the auditor's management letter.