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Independent auditors give San Rafael a clean opinion; Q1 budget update shows typical timing patterns
Summary
External auditors issued an unmodified (clean) opinion on the city's FY25 financial statements and reported one 'other matter' related to informal bidding documentation; the council accepted the audit and a first-quarter budget update showing $26 million in first-quarter revenue and continued reserve compliance.
Whitney Crockett, audit partner at Mays & Associates, reported to the council that the city's fiscal year ended June 30, 2025 financial statements received an unmodified (clean) audit opinion and that the child development program audit also received a clean opinion.
Crockett said auditors noted one 'other matter' related to purchasing policy compliance: in testing 25 disbursements the auditors found supporting documentation was not available for two informal bid transactions and recommended strengthened procedures and documentation across departments. "We noted that the city wasn't able to provide supporting documentation for two disbursements related to the informal bidding process," Crockett said. The report includes a management response and an action plan.
Finance Director Navarro summarized the first-quarter (through Sept. 30, 2025) budget update: all‑funds revenue came in at about $26,000,000 (about 13.7% of the amended budget) and expenditures and encumbrances totaled roughly $52,000,000 (about 23%). Navarro noted the amended budget increased from the adopted budget primarily because of encumbrances rolled forward and supplemental appropriations approved at the end of the prior fiscal year. He told the council the general fund ended the prior year meeting the council's 15% reserve policy and that some excess fund balance has been assigned to deferred maintenance (including streets) and other categories pending council direction in the budget process.
Councilmembers discussed how a pattern of clean audits helps with credit ratings and future borrowing terms. Vice Mayor Bushey moved to accept the annual comprehensive financial report, memorandum on internal control, child development program report and appropriation limit report; the motion passed 5–0. Councilmember Hill moved to accept the FY25–26 first-quarter budget update (attachment A); that motion also passed 5–0. Navarro said the mid‑year report (through six months) will return early in the calendar year to update projections and to inform FY27 budgeting.
