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Hawaiian Gardens audit issues unmodified opinion; casino taxes remain largest revenue source
Summary
Auditors issued an unmodified opinion on the City of Hawaiian Gardens' financial statements for the year ended June 30, 2024, reporting a $52.5 million net position and noting casino-related business license taxes as the largest revenue source.
Matthew Linton, an audit partner with Gruber and Lopez, told the City Council on Jan. 8 that the firm issued an unmodified opinion on the City of Hawaiian Gardens’ financial statements for the year ended June 30, 2024.
Linton said the audit found no material weaknesses or significant deficiencies in internal controls and no material noncompliance under government auditing standards. “An unmodified opinion is the highest opinion the auditors can issue,” he told the council.
The audit presentation highlighted several financial points from the city’s annual comprehensive financial report. Business license taxes were the largest governmentwide revenue source at about $13,700,000; auditors said casino revenues account for approximately 95% of that line item. Governmental activity expenses were $25,300,000, an increase Linton said is primarily associated with pension and OPEB expenses. The city’s net position at June 30, 2024 was reported as $52,500,000, an increase over the prior year.
Linton also summarized components of fund balance and reserves: the city’s unrestricted net position was reported at $6,700,000, restricted net position at $15,400,000 and the general fund balance at $32,100,000. The report notes $20,000,000 held in contingency reserves.
The auditors said the city submitted its report to the Government Finance Officers Association (GFOA) for consideration of the Certificate of Achievement for Excellence in Financial Reporting; the city had previously received that award for the year ended June 30, 2023.
A council member cautioned that market-driven gains cited in the report are volatile and not under the council’s direct control. Linton agreed, noting the audit reflects a point-in-time snapshot of market and financial conditions.
No formal council action was required or taken on the audit beyond receipt of the report during the meeting.
The audit report and related materials are posted on the city’s website, according to staff.
