Auditor issues clean opinion on Crescent City’s fiscal 2023–24 financial statements

The City of Crescent City received a clean independent auditors’ report for fiscal year 2023–24 at its Jan. 13 meeting, Finance Director Linda Lieber said.

Mitesh Desai of Badawi and Associates presented the audit findings by video and told the council the firm issued an unmodified opinion — the standard phrasing that indicates the financial statements are fairly presented in all material respects. “We’ve issued an unmodified opinion on these reports,” Desai said during the presentation.

Why it matters: An unmodified opinion indicates the city’s financial statements met generally accepted accounting principles and that auditors found no material misstatements. The auditor also reported no material weaknesses in internal control and said audit adjustments recorded by management were not considered material.

What the auditors reviewed: Desai summarized the firm’s risk‑based approach, noting areas of focus: management override of controls, revenue recognition, pension and OPEB accounting, and significant estimates such as allowances for uncollectible accounts and depreciation. He noted the city’s net pension liability rose slightly with statewide movements in CalPERS investments.

Key figures and observations presented by staff: Finance Director Linda Lieber said the audit was completed Dec. 30, 2024, and that final statements are being posted to the city’s website. Auditor Desai showed the city’s government‑wide statements, a multi‑year trend of positive general fund balances and a general fund unrestricted balance sufficient to cover several months of operations. He showed that the city historically maintained an unrestricted general fund balance equal to about seven months of operating expenditures, above the Government Finance Officers Association’s two‑month cautionary threshold.

Process notes and follow‑ups: The auditors noted new accounting pronouncements to be implemented in coming years (affecting compensated absences and some enterprise reporting) but said none materially affected the 2023–24 statements. The firm also performs the single‑audit procedures required for entities receiving significant federal awards; the single audit and a separate Housing Authority report were still to be issued in the coming months.

Council response: Council members and staff thanked the auditor and finance director for the clean report and for the finance office’s work tracking multiple grants and funds.

Council action: The council agreed by consensus to receive and file the audit report; no roll‑call vote was required for the receive‑and‑file action.