County auditor presents FY23–24 ACFR; board presses for clearer reserves tracking and quarterly budget reviews

San Benito County’s auditor presented the final FY2023–24 Annual Comprehensive Financial Report (ACFR) May 12 and supervisors used the briefing to press for clearer tracking of reserves, committed funds and long‑term contract commitments.

Assistant Auditor-Controller Lianne Govines said independent auditors Eide Bailly issued an unmodified opinion on the ACFR, which was finalized Dec. 30, 2024. Govines summarized key items: general fund revenues rose about $7.6 million over the prior year (driven by a one‑time developer payment of about $6.1 million, $6.7 million in insurance recoveries tied to the Hall of Records fire, and roughly $3 million in combined tax and investment income increases). General fund expenditures increased about $11 million year over year, of which roughly $6.7 million related to Hall of Records fire impacts and about $3.5 million to salaries and services.

On the Hall of Records fire, Govines said the county had received approximately $6.7 million in insurance proceeds as of June 30, 2024; additional payments related to restoration remain under audit by the insurer’s outside auditors and a residual amount (reported in discussion as roughly under $400,000) remains unsettled pending final audit and approvals. Govines said the building still needs reconstruction after abatement and cleanup work.

Govines reviewed GASB 54 fund balance classifications and noted the board’s fund‑balance policy resulted in reassignment of unassigned to assigned balances; as of June 30, 2024 the board’s operational, emergency and disaster assignments totaled $16,551,000. She emphasized that accounting is historical while budgeting is forward‑looking and urged the board to consider June‑30 actuals plus FY24–25 projections when estimating July 1, 2025 financial positions.

Supervisors asked several process and policy questions. One supervisor requested that outside auditors clarify why the board’s policy was not reflected as “committed” in ACFR disclosures; Govines said auditors judged the policy wording did not meet the stricter definition for committed fund balances (which generally requires formal board action such as resolution or external constraint). The board’s discussion ranged to procurement practices and contract encumbrances across fiscal years: supervisors urged a system-level report that lists multi‑year contract commitments and remaining balances so the board can evaluate future-year obligations before adopting budgets.

Board members pressed for more frequent (quarterly) budget reviews and for staff to aggregate trust and restricted accounts that departments might tap to reduce general fund pressure. Govines and CAO Ring said staff are meeting with departments and will provide more granular data; the board set direction to pursue more regular budget reporting and to seek clarification from auditors at the next audit committee meeting.