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San Luis Obispo receives unmodified (clean) audit for fiscal year 2024–25; two prior ERP issues reported resolved
Summary
City finance staff and auditors reported an unmodified audit opinion for FY 2024–25. Auditors noted positive fund balance trends and that two prior findings tied to Oracle ERP configuration have been addressed; a material weakness for journal entries and a prior payroll module deficiency were discussed as improved or resolved.
City finance staff and external auditors presented the Annual Comprehensive Financial Report for fiscal year 2024–25 and reported a clean (unmodified) audit opinion.
Debbie Malecote of the Finance Department told the council the audits are a multi‑month process and "I am pleased to report that the city received another unqualified or clean audit opinion," noting positive results across the general fund and four enterprise funds. Auditor Mitesh Desai (Bedawi and Associates) explained the firm issued an unmodified opinion on the financial statements and summarized that revenues exceeded expenses overall for the year.
Staff said the city generated over $144 million in total revenues for the fiscal year, with the local 1.5% sales tax bringing in nearly $31 million. The auditors reviewed federal and state compliance reports (TDA, single audit) and confirmed no questioned costs for federal awards this year.
Auditors also discussed two areas of prior concern tied to the city's Oracle ERP configuration—manual journal‑entry posting and an earlier payroll‑calculation configuration—and reported fixes have been implemented. Desai noted that management recorded audit adjustments for restricted cash and grant receivables during the audit and that while the auditors recorded material adjustments in certain lines, management posted the corrections before completion. Auditors said there remains a continuing material weakness historically tied to journal entries and a prior payroll module deficiency but expressed confidence in recent configuration upgrades that should remove previous findings going forward.
Council members thanked staff for the work and asked follow‑up questions about the potential cost to replace Oracle if that were considered; staff said they would research and return with an estimate. No action was required other than receipt and filing of the report.
