Finance committee forwards Oxnards FY 2023-24 comprehensive financial report after auditors issue clean opinion

The Oxnard City Finance & Governance Committee voted 3-0 on March 11 to send the fiscal year 2023-24 Annual Comprehensive Financial Report (ACFR) and related auditor materials to the full City Council.

Brandon Farrell, an audit partner with EDMP, told the committee the auditors had issued a clean opinion for the year ending June 30, 2024. "This year, as in prior years, we have a clean audit opinion," Farrell said during the presentation. Farrell highlighted that the audit was risk-based, noted recent accounting guidance (GASB 100) and identified significant accounting estimates including pension and OPEB valuations, allowance for doubtful accounts, self-insurance claims and contingencies.

The nut of the report, Farrell said, is an $85.3 million improvement in the citys net position for the year, with government activities up $62.3 million and business-type activities up nearly $23 million. Farrell also described several audit adjustments and a prior-period adjustment: a $1.3 million notes receivable correction tied to timing of payments and a prior-period adjustment related to construction-in-progress and asset transfers from the successor agency that reduced net position in governmental activities by about $6.3 million and business-type activities by about $10.3 million.

Chief Financial Officer Javier (presenting for the City of Oxnard) told the committee the ACFR reflects collaboration across departments and that the transmittal letter and management discussion and analysis provide the quickest view of the citys fiscal health. He also said the ACFR aligns with a credit-rating upgrade Oxnard received in December.

Farrell said the auditors will issue an internal-control report tied to the single-audit work and that the single audit draft was expected "early next week." He also noted that auditing standards require auditors to treat improper revenue recognition as a significant fraud risk unless there is clear justification otherwise, and that contingencies from litigation are a recurring area for disclosure review.

After the presentation, a committee member moved to forward the ACFR and the motion was seconded. The clerk recorded votes: Chair McArthur yes; Committee member Rodriguez aye; Committee member Star yes. The motion carried 3-0.

The committee did not take any additional action other than recommending the ACFR be presented to the City Council for ratification and approval.

Looking ahead, the auditors internal-control letter and the single-audit draft will be shared with management and then provided to the City Council as part of the package presented at the next council meeting.