City auditor issues clean opinion on Carson’s FY 2023–24 financial statements; single-audit flags two federal program findings

An independent audit of the City of Carson's finances returned an unmodified opinion for the fiscal year ended June 30, 2024, the auditor told the City Council on Feb. 4.

Christie Canada, representing Vasquez & Company, told the council the firm spent close to 1,000 hours auditing the city's accounts and found no material weaknesses or significant deficiencies in internal control over financial reporting. "We concluded the audit by issuing an unmodified opinion on the city's financial statements," Canada said.

The auditor said the city also underwent a single audit of federal awards. Vasquez identified two major federal programs for testing: Community Development Block Grant (CDBG), with about $1,100,000 spent during the year, and American Rescue Plan Act (ARPA) funds, with about $3,350,000 spent during the year. The single-audit work covered roughly 91% of the city's federal expenditures; Vasquez reported two federal-awards findings described as administrative in nature and noted no questioned costs.

Why it matters: An unmodified opinion means the auditor believes the financial statements present fairly the city's financial position under applicable accounting standards. The single-audit findings require corrective action on grant administration and are subject to follow-up by staff and the auditor.

Key financial highlights presented by the auditor included: - Government-wide net position increased by $9.1 million during the year. - Unrestricted net position declined by $6.3 million year-over-year. - Government-wide expenses increased to $162.2 million in 2024 from about $128.0 million in 2023. - Net pension liability rose to approximately $15.1 million from $10.2 million the prior year; net OPEB liability decreased to about $34.0 million from $36.4 million. - General Fund fund balance components were reported (restricted $23.3 million; committed $30.8 million; assigned $92.1 million; unassigned roughly $73.0 million).

Council reaction and next steps: Councilmember Cedric Hicks asked plainly whether the city is "solvent." Canada answered, "Yes." City staff and council discussed that much of the improved fund position reflects one-time receipts and council-directed spending decisions, including recent capital projects and legislative revenue measures adopted in prior years. City Manager and Finance Director William Jefferson were present for the presentation; staff said they will continue follow-up on the auditor's management-letter recommendations and the two federal-award findings.

Votes at a glance: The annual comprehensive financial report (item 19 on the agenda, "receive and file" for FY ended 06/30/2024) was removed from the consent calendar for the presentation and then approved as part of the consent calendar later in the meeting. The council approved all consent items, including that report, by a unanimous vote. The council also approved second readings of two ordinances (read on the record as "ordinance number 20 five-two 501" and "ordinance number 20 five-two 502") by unanimous vote; details of those ordinances were not discussed during the audit presentation.

What the audit does and does not say: Canada emphasized the audit provides "reasonable assurance" and that management is responsible for the financial statements. The auditor said there were no disagreements with management, no significant unusual transactions, and no material misstatements remaining after proposed audit adjustments were recorded. Vasquez included recommendations in a management letter, including suggestions related to IT policies and other internal controls; staff agreed to the proposed adjustments and said they will implement recommended internal-control improvements.

Looking ahead: Staff noted the audit is a step toward a Certificate of Achievement in governmental accounting and financial reporting; officials said the finance department will pursue that external recognition later in 2025. The auditor also listed upcoming accounting standards the city will need to track.

Ending note: Council members and the city manager framed the report as a positive sign of fiscal stability while cautioning that portions of the fund balance are nonrecurring and that pension and operating costs remain items for long-term monitoring.