Independent auditors give City of Fresno a clean opinion on 2023–24 financial report

External auditors presented the results of the City of Fresno's Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2024, and delivered an unmodified (clean) opinion, audit partner Andrew Roth told the Finance & Audit Committee.

The nut of the report: auditors found the city's financial statements "fairly presented in all material respects," with no material weaknesses or significant deficiencies in internal control reporting, Roth said. The single audit of federal programs likewise received a clean opinion, and auditors reported no findings of noncompliance that rose to the level of material weakness.

Roth, the audit partner for the external firm conducting the engagement, told the committee the audit scope included the financial statement audit, the federal Single Audit (Schedule of Expenditures of Federal Awards), pass-through facility charge audits (including airport-related charges), and agreed-upon procedures where requested. He said the audit assesses whether management presented the statements in accordance with accounting principles generally accepted in the United States and evaluates internal controls relevant to financial reporting.

Roth noted there were two uncorrected misstatements and no corrected misstatements; he described them as above trivial posting thresholds but not material to the financial statements. He also emphasized implementation of required technical standards, noting the city implemented GASB Statement 100 during the period with no significant effect.

City Controller and Finance Director Santino Denisey introduced the presentation and highlighted the work of the finance staff who prepared the statements and supported the audit. Denisey and Roth told the committee auditors and management share responsibilities: management for the preparation and fair presentation of the financial statements, and auditors for issuing an opinion after testing that presentation and internal controls.

Roth reviewed several items the committee may consult in the report: significant accounting policies and estimates (note 1), disclosures on pension and other postemployment benefit estimates, capital assets and long-term debt, and cash and investments. He called attention to the report's discussion of cash and investments, characterizing the cash/investment note as a major disclosure item in the statements. He also reminded the committee the American Rescue Plan Act (ARPA) funds remain subject to annual audit while those funds remain on the schedules and that the city used a risk-based approach to select major federal programs for testing.

Committee members asked clarifying questions about the uncorrected misstatements and public readability of the ACFR. Roth explained the uncorrected items were differences between recorded amounts and what the auditors expected; one was related to subscription liabilities and described as an overstatement of a liability. On public readability, Denisey said the report includes a controller's transmittal letter and a management's discussion and analysis section, plus charts and graphics, intended to make the results more accessible.

No internal control deficiencies rose to the level of reportable findings, Roth said, and auditors reported no disagreements with management on accounting treatments or audit procedures.

The clean audit and single-audit results were presented without a formal committee vote; the committee received the external auditor's report and had an opportunity for questions.

Ending: Committee members thanked the auditors and finance staff for the work. Roth said a formal auditor's letter would be issued to management following the presentation and that the external report and related communications would be provided to committee members and management.