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Loomis audit returns clean opinion but flags internal-control gaps and recommends formal reserve policy
Summary
An independent audit gave the Town of Loomis an unmodified ("clean") opinion on its FY2022–23 financial statements but found internal-control weaknesses tied to prior staffing and segregation-of-duties gaps and recommended written reserve and accounting policies, additional accounting personnel, and clearer procedures for grants and developer deposits.
An independent audit of the Town of Loomis’ fiscal year 2022–23 finances delivered a clean (unmodified) opinion but highlighted weaknesses in internal controls and recommended several management and procedural fixes.
Ingrid, the managing partner from the audit firm commissioned by the town, told the council the financial statements were "fairly presented" and that the firm issued an "unmodified or clean opinion" on the statements. The audit team called out a number of areas for improvement tied to staffing and process, not to deliberate misuse of funds.
The audit identified several notable financial balances and trends: $1,500,000 of unearned (deferred) ARPA revenue that must be recognized as expenditures occur; a general-fund balance of about $4.1 million (with roughly $2.9 million formally committed or assigned to reserves); and an increase in the town’s CalPERS pension liability to roughly $1.1 million driven by unrealized investment losses.
More consequential for operations were the internal-control observations. The audit found that during the reported fiscal year a single individual handled multiple finance duties—processing payroll, preparing bank reconciliations and journal entries, and maintaining sole access to an investment account—without documented supervisory review. Time sheets were not consistently approved, and some recurring accounting tasks lacked segregation of duties or independent review.
Ingrid recommended a package of reforms: hire or assign additional accounting staff to segregate duties; adopt a formal fund-balance (reserve) policy; update the employee handbook and credit-card policy; establish grant-tracking procedures and formal accounting manuals and closing checklists; maintain a file of journal entries and supporting documentation; and add redundancy (multiple signers) on investment accounts and reconciliations.
Town Manager Wes praised the audit process and acknowledged staffing challenges during the period under review. Wes said the town has already moved to add personnel (an accounting technician in May 2024 and a finance director, Ted Williams, who began Sept. 30) and that many of the audit firm’s suggestions are already in progress. Council members thanked the audit team and staff, noting that several recommendations had already been addressed since the audit period.
Next steps outlined to the council include drafting a formal reserve policy during the next budget cycle, updating personnel and credit‑card policies, completing grant-tracking improvements and bringing recommended procedural changes to council for review.
The audit presentation concluded with council direction that staff return with policy language (for example, a fund-balance policy) as part of the budget process so the town can demonstrate timely implementation of the recommendations to future auditors and state reviewers.
