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City auditors outline CAFR timeline, audit scope; GASB changes flagged
Summary
External auditors MGO and KPMG told the Government Audit and Oversight Committee the city's Comprehensive Annual Financial Report is likely to be completed in November, with single audits to follow, and outlined audit responsibilities and upcoming GASB accounting changes affecting OPEB reporting.
The Government Audit and Oversight Committee heard a joint presentation from MGO and KPMG on Oct. 6 about the city’s upcoming financial audits and accounting standards changes.
Carmen LaFrank of the Controller’s Office said the final fieldwork for the Comprehensive Annual Financial Report is underway and that "we anticipate it will be completed in November, probably right around Thanksgiving." She added the single audit will be finished afterward and the auditors will return to present findings in the spring.
Auditors described the scope of services they will perform. MGO said it will audit the CAFR, the city’s single audit, the retirement system, the successor agency, two hospitals, the Port of San Francisco and other agreed‑upon procedures. KPMG said it will audit selected standalone departments including the San Francisco Health Service System, the Municipal Transportation Agency and the Public Utilities Commission and will report on additional agreed‑upon procedures for the MTA and the airport.
The auditors emphasized that audits provide "reasonable assurance" rather than absolute assurance and that management retains responsibility for financial statements and internal controls. MGO noted upcoming Governmental Accounting Standards Board statements 74 and 75 related to post‑employment benefits and said the standards will require substantial changes in how OPEB is presented for both plans and employers. KPMG added that the MTA elected to early adopt GASB 82 and will report that adoption in its 2016 audit.
No members of the public testified on the audit plan. The committee filed the item by motion and will expect auditors and staff to return with completed audit reports as scheduled.
The committee did not take any substantive action beyond filing the audit plans; the CAFR and related single‑audit results will be presented to the committee in the coming months.
