CalHFA audit committee interviews Eide Bailly and MGO to replace auditor contract expiring December 2025

The Audit and Risk Management Committee of the California Housing Finance Agency (CalHFA) met Sept. 18, 2025, to interview two finalist firms for its independent audit contract, which is scheduled to expire in December 2025. Eide Bailly and Macias Gini & O'Connell (MGO) each gave a brief opening presentation and answered the committee’s structured questions about transition planning, risk assessment, staff continuity, and information security.

Chair Sotelo opened the session by describing the committee’s role under its charter and said the interviews would inform a recommendation to the full board, which will be announced at the next board meeting. Eide Bailly’s team (Kevin Smith, Chris Mateka, Kennali Sukasam, Carly Ransom) emphasized the firm’s government and housing finance experience and said it would use prior-year PBC (prepared-by-client) lists and predecessor workpapers where appropriate to create a smooth transition. Kevin Smith said he has been with the firm “for a little over 30 years,” highlighting continuity at the partner level.

On planning and risk assessment, Eide Bailly described a three-phase audit (planning, interim, year-end) and said it would prioritize testing where there are significant estimates: other real estate owned (OREO), allowance for loan losses, derivatives and swaps, compensated absences, and federal revenue recognition. Kennali Sukasam, describing the firm’s approach to disagreements with management, said: “Our philosophy to findings is, there are no surprises to findings,” explaining that potential exceptions are discussed in team status meetings and findings are issued in draft form so clients can suggest factual edits before finalization.

Committee members pressed both firms on staff consistency and regulatory knowledge, citing HUD rules, recent and forthcoming GASB pronouncements, and the Uniform Guidance on federal awards. Eide Bailly described mandatory HUD/GASB training for its housing-finance group and a core staffing model to preserve institutional knowledge. Eide Bailly and MGO both said partner-level involvement is continuous and that they can adapt communication frequency to the client’s preference (email, Teams, weekly or more frequent check-ins).

On data and document security, Eide Bailly described a secure, encrypted portal (referred to in the presentation as ShurLink) to receive documents and to limit access to engagement teams and identified client contacts; the firm also said it removes personal identifiers (names, loan numbers) from testing files as a security precaution. MGO described use of Citrix ShareFile (SAS 16 compliant), analytics tools (IDEA, DataSnipper), and CaseWare for financial-statement workpapers and CPS retention.

MGO’s team (Annie Louie, Russell Robertson, John Waller, Alex) stressed local government experience, participation in standard-setting panels (AICPA and GASB task forces), and a collaborative approach intended to reduce disruption to management. Russell Robertson said the firm integrates successor-predecessor transition tasks into initial audit planning and focuses first-year procedures on beginning balances because of elevated transition-year risk.

The committee allowed time after both firms’ closing statements to complete scoring sheets; the chair said staff will compile scores and present a recommendation to the larger board at the next meeting. No formal selection vote occurred at this meeting.

Votes at a glance: the committee approved the prior meeting minutes as presented (no objections noted); no other formal board actions or votes were taken on auditor selection during this session.

Next steps: staff will total scores and report the committee’s recommendation to the full CalHFA board at its next meeting.