The Audit Committee voted to accept the city's draft Annual Comprehensive Financial Report (ACFR) on a motion and voice vote, with the committee and auditors noting only non-substantive edits remained and that acceptance would allow staff to file with the state by Dec. 31.

The move matters because the ACFR provides the comprehensive, accrual-based view of the city's finances used by bond raters and state reviewers. Finance staff and auditors told the committee that the general fund's unassigned balance is roughly 14.5 percent of expenditures, below the policy target of 17 percent. Deputy Finance Director Kevin Brown said, "Our fund balance policy is 17% of the next year's budgeted expenditures," and staff said fiscal 2026 budget restorations and a new budget sustainability reserve are intended to bring the measure to target next year.

The committee also reviewed the MD&A (Management's Discussion and Analysis). John Crossland, an external auditor who said he received the MD&A "about two hours ago," told the committee he "went through it very quickly" and did not see items that would hold up issuance beyond routine tick-and-tie work. Staff described MD&A sections that compare this year to last, explain deferred inflows/outflows (pensions/OPEB), and reconcile government-wide (accrual) to fund (modified-accrual) accounting. They noted recent debt issuances and a new GASB requirement to include compensated-absence estimates, which increased reported liabilities across funds.

Committee members flagged editorial issues and a numeric display error in a highlighted bullet; staff said the percentage in question was correct and the underlying number would be fixed before final publication. The finance director (unnamed) emphasized timing: "Ideally, it would be accepted today because we want to have this filed by 12/31," and warned that failing to file on time could have consequences for state compliance and bond ratings.

Earlier in the meeting the committee asked about the delivery of the hospital's audit work. Kimberly Blackledge, who introduced herself as "interim chief financial officer at National General Hospital," told the committee there had been a miscommunication that she "own[s]," that KPMG was reengaged and held accountable, and that the hospital delivered the necessary items. Blackledge said the project finished under budget and the hospital implemented internal policy and process changes as lessons learned.

The committee's motion to accept the ACFR passed on a voice vote after a motion and second; no roll-call tally was recorded in the public meeting transcript. Finance staff said Crossland will finish tick-and-ties and submit the final ACFR to the state comptroller's portal; the state and the Government Finance Officers Association (GFOA) will each review the filing and provide comment, which will be made public and addressed in responses and future reports. The finalized ACFR will also be posted on the city finance webpage.

Next procedural steps: staff will finalize clerical edits, submit to the state and GFOA, and distribute state review letters and staff responses to the council. Committee members were told to forward any follow-up questions to the designated coordinator named in the meeting.