CFAOC accepts 2022–23 independent financial audit; auditors and Controller's Office find no material deficiencies

The Citizens Financial Accountability Oversight Committee unanimously approved the 2022–23 independent financial audit of the California Institute for Regenerative Medicine (CIRM) during its Dec. 18, 2024 meeting at the State Controller's Office.

The adoption follows a presentation by the independent auditors from Macias, Gini & O'Connell (MGO) and a separate quality-control review by the State Controller's Office. Craig Harner, the engagement partner for the audit firm, said the auditors obtained sufficient evidence to issue an unmodified (clean) opinion on CIRM's financial statements for the year ended June 30, 2023, and reported no material weaknesses in internal control or instances of noncompliance with applicable laws governing the use of bond proceeds.

The auditor's report, presented to the committee, covered CIRM's financial statements, budget-to-actual statements and the notes to those statements. Harner said the audit included a government-auditing-standards review of internal control and compliance and also produced a limited-scope opinion on supplementary grant schedule information.

Kimberly Tarvin, chief of the Audit Division at the State Controller's Office, then reported on the office's quality-control review of MGO's work. Tarvin said the State Controller's Office concluded MGO performed the audit in accordance with applicable professional auditing standards and the California Business and Professions Code. She noted the quality-control review, issued in October 2024, is intended to provide an additional level of assurance to users of the audit report.

Committee members asked questions about related-party disclosures, milestone-driven grant payments and unused fund balances. In response, the auditors described CIRM's fund structure (separate funds for Prop 71, Prop 14 and licensing/royalties) and noted that milestone-driven grants can delay cash outlays when grantees have not yet met contract milestones.

The committee recorded two formal votes during the meeting that related to the audit process. The committee first approved minutes from the May 29, 2024 meeting by roll call and then voted to adopt the 2022–23 independent financial audit. Both motions passed unanimously.

The State Controller's Office and MGO will continue follow-up work required by audit and oversight procedures. No action was taken at the meeting that changed CIRM's audited financial statements; the committee's action was to accept and adopt the auditor's report and the Controller's quality-control review.

Details of the formal motions and roll-call votes appear below.