Berkeley finance director and new auditors report clean FY2024 opinion but flag internal-control weaknesses and corrections

Finance Director Carl Johnson presented the City of Berkeley’s fiscal year 2024 financial report and said independent auditors issued an unmodified opinion while also documenting multiple internal-control weaknesses and corrections to prior-year accounting.

The most consequential correction addressed invoices misallocated at June 30, 2023. Johnson said auditors and staff corrected errors that had left the water and sewer fund artificially low; after adjustments, "we have $73,000 worth of cash in our water and sewer fund," he said. The audit report and Johnson’s presentation showed the correction redistributed roughly $1.5 million among funds (reducing the major streets and infrastructure balances and increasing the water and sewer balances) and removed an interfund borrowing that had appeared on prior reports.

Greg Soul, partner in charge of the city audit, told council the engagement was the auditors’ first year on the account and that, given transitions in staff and prior documentation gaps, findings were not uncommon. "It is a clean or an unmodified opinion," Soul said of the audit opinion. He also told the council…