City auditor delivers clean opinion on Seaside’s 2023–24 finances; council accepts report

Seaside’s external auditors presented an unqualified, or “clean,” opinion on the city’s financial statements for the fiscal year ending June 30, 2024, and the City Council formally accepted the audit at its March 10 meeting.

Rick Pru, of auditing firm Kern & Thompson, told the council the firm followed generally accepted auditing standards and governmental auditing standards in issuing the opinion and that their testing of transactions, internal controls and compliance found the statements to be “fully stated” for the year ending 06/30/2024. “In our opinion, these statements are fully stated as of and before the end of the year,” Pru said.

Nut graf: The independent audit shows Seaside’s combined net position rose about $5.5 million compared with the prior year, total revenues increased from roughly $27.5 million to about $32 million, and the audit flagged one upcoming requirement: because the city used some American Rescue Plan Act (ARPA) funds on a project, next year’s report will include a federal single-audit for that transaction.

The audit's highlights and council action - The auditors reported an increase in the city’s overall net position of about $5.5 million, driven largely by governmental activities; enterprise funds (water, sewer and the convention center) broke roughly even. - Total revenues rose from about $27.5 million to roughly $32 million, while expenditures increased by a bit more than $1 million. - The auditors noted substantial infrastructure spending during the year and reported that some ARPA funds were used to acquire parkland; that ARPA transaction will trigger a single-audit requirement next year. - Kern & Thompson also reported growth in the city’s pension plan assets of “just under $2.5 million,” and said actuarial assumptions and market returns influenced liability and asset changes.

Pru described the audit opinion as a “clean opinion” and explained the firm’s process: sampling transactions, confirming balances with outside parties and reviewing internal controls. He told the council the audit “went very well” and that staff provided necessary information, which improved in the second year under the current audit team.

Council acceptance and next steps Councilors moved to accept the audit and file it with the city recorder. The motion carried on a voice vote; no formal roll-call objections were recorded during acceptance. Councilors and staff thanked finance staff for their work compiling the financial statements and said the report will be posted on the city website for public review.

Council members and staff noted items for ongoing follow-up: the timing and documentation needed to support future single-audit work on ARPA spending; continued improvements as the city migrates to a new financial system; and monitoring pension actuarial assumptions.

"This is what's called a clean opinion," Pru said during his presentation, and he encouraged councilors to contact the audit team with questions during the year.

Ending: The accepted audit will be filed with the city recorder and made available to the public; staff said they expect continued cooperation with the auditors during next year’s process, including the additional single-audit procedures tied to ARPA spending.