City of Carson audit yields unmodified opinion; general fund balance rises as pension liability grows

Christie Canada, an engagement partner with Vasquez & Company, told the Carson City Council on Feb. 4 that the firm issued an unmodified opinion on the city's financial statements for the fiscal year ended June 30, 2024. "Unmodified opinion means a clean opinion," Canada said.

The audit, Canada said, included nearly 1,000 hours of fieldwork and a single-audit examination of federal programs. She said auditors identified the Community Development Block Grant (CDBG) and the American Rescue Plan Act (ARPA) as major federal programs for the year and issued an unmodified opinion on compliance for those programs.

The report presented several headline figures. Canada said government-wide net position increased during the year and that the city's general fund balance grew compared with the prior year. At the same time, the city's net pension liability increased, driven by actuarial assumptions used in the valuation.

"We concluded the audit by issuing an unmodified opinion on the city's financial statements," Canada said during the presentation. She reported no material weaknesses or significant deficiencies in internal control over financial reporting. She also said auditors noted two federal-award findings (administrative) but no questioned costs and that prior-year findings had been resolved.

Councilmember Cedric Hicks asked whether the city is solvent; Canada responded, "Yes." Council members and staff discussed that the council's 2020 revenue measures, together with the city's pension obligation strategies, contributed to improved reserves.

City Manager (unnamed) and Finance Director William Jefferson joined the presentation and thanked Vasquez & Company and the finance staff. The council received and filed the city's Annual Comprehensive Financial Report as part of the consent calendar later in the meeting; the consent calendar passed unanimously.

The audit slides noted selected details that appear in the full Annual Comprehensive Financial Report: the city identified CDBG spending of $1,100,000 and ARPA spending of $3,350,000 for the year; auditors described government-wide expenses and movements in unrestricted net position and noted a decrease in unrestricted net position during the year even as overall net position rose.

The auditors also listed forthcoming accounting standards and described management estimates used in the statements (pension and OPEB valuations, collectibility of receivables). Canada said Vasquez remained independent and that she encountered no disagreements with management during the audit.

The council took no separate substantive action beyond placing the report on the record; the item was approved on the consent calendar.

The full annual comprehensive financial report is available in the city's records; council members said they will use the report during upcoming budget and policy discussions.