Ridgecrest auditor issues clean opinion; report shows nearly $25 million unassigned general fund balance

Ridgecrest's external auditors told the City Council on March 13 that the city's fiscal year 2024 financial statements received an unmodified opinion and that the city's unassigned general fund balance stands at roughly $24.9 million.

Colley Delaney, partner with the Pooh Group, presented the fiscal 2024 ACFR and said auditors issued an "unmodified opinion" for all opinion units, a term auditors use for a clean audit. He identified one material weakness in internal control that resulted from prior-period adjustments in the city debt service fund and the TDA transit enterprise fund; auditors said they will include that finding as 2024-01 in the single-audit grant report that is in draft form.

The audit presentation summarized government-wide and fund-level results. Citywide assets increased by about $15 million for the year; governmental assets rose roughly $18 million and business-type assets fell about $3 million. Auditors reported a large year-to-year swing in pension expense driven by CalPERS investment returns: pension expense moved from about $14 million in fiscal 2023 to a pension income amount of about $4 million in 2024, an $18 million swing auditors said materially reduced net cost of services.

At the fund level, Delaney said the general fund reported roughly $25 million in cash and investments and an unassigned fund balance of about $24.9 million, up from about $13 million in the prior year. The auditors noted $3 million in taxes receivable and $3.6 million due from other funds on the balance sheet; advances from other funds were about $2.6 million.

Delaney also reviewed pension sensitivity: combining miscellaneous and safety plans, the city's net pension liability was about $6.2 million at the audit date; auditors showed how changes to CalPERS' discount rate would materially change that liability.

Delaney said there were a few corrected misstatements that required prior-period adjustments and one immaterial uncorrected misstatement in the general fund. He told council there were no disagreements with management on accounting treatments and that auditors did not uncover fraud, waste or abuse.

Council members asked for help locating reserve details in the ACFR and staff said they would provide a breakdown showing which portions represent voter-approved measures (Measure V and Measure P) that are reported in the general fund but tracked separately internally.

The auditors recommended the pages and notes they consider highest priority for review (Note 1 summary of significant accounting policies; Note 10 risk management; Notes 11 and 12 on pension and OPEB; Note 13 other required disclosures; and Note 16 for prior-period adjustments).