Auditors give Salinas a clean opinion on 2025 financial report; committee lacks quorum to approve minutes

Selena Andrews, Finance Director for the City of Salinas, and auditors from the city's external firm presented the 2025 Annual Comprehensive Financial Report on Feb. 3, 2026, and told the Finance Committee the city's financial statements "are fairly stated in conformity with accounting principles generally accepted in the United States." The committee did not have a quorum and tabled approval of the minutes.

"We issued unmodified opinions to all opinion units," said Colleen Delaney, the engagement partner from the city's external auditing firm, summarizing the audit results. Delaney said the opinions indicate the financial statements are fairly presented in all material respects and that the auditors identified no material weaknesses or significant deficiencies in internal control over financial reporting.

Delaney and Andrews walked the committee through key year-over-year changes. Governmental activities net position increased by $28.5 million in 2025 (after a $6.0 million loss in 2024), driven in part by increases in assets and tax revenue. The auditors said about $21.0 million in American Rescue Plan Act (ARPA) funds that had been recorded as unearned revenue were spent and recognized as revenue in 2025.

On enterprise activity, business-type activities saw asset decreases of about $3.5 million largely from depreciation; overall net position for enterprise funds fell about $1.1 million to $53.3 million. In the general fund, total assets increased roughly $3.6 million and taxes receivable rose from $17.9 million in 2024 to $20.6 million in 2025. The city reported a $5.3 million increase in general fund balance for the year.

The ACFR includes several disclosures the auditors flagged for attention: significant accounting policies, stewardship and compliance, long-term debt, retirement and other post-employment benefit (OPEB) programs, net position classifications, and changes to the financial reporting entity related to recent GASB implementations. Delaney noted some ACFR amounts rely on actuarial or other estimates (pension and OPEB liabilities, fair value of investments, depreciation), and staff and auditors said those estimates were reasonable and not materially misstated.

The auditors said the 2025 federal single audit (required for entities expending more than $750,000 in federal funds) remained in progress but that they did not anticipate findings. The ACFR will be submitted to the Government Finance Officers Association for consideration for the award for excellence in financial reporting.

In a brief question-and-answer exchange, a committee member recalled seeing an unrestricted investments total of about $77 million at an earlier date; Andrews clarified that the $77 million referenced all funds as of Sept. 30, whereas the presentation focused on the general fund. The chair asked whether roughly $35 million mentally set aside for infrastructure remained available; staff said much of that money likely remains but would have to be accessed through the appropriate fund-routing and approvals.

Procedurally, because a quorum was not present the committee tabled approval of the minutes until a future meeting and the chair noted a special session scheduled for Feb. 17 where the ACFR could be presented again to a full body. The meeting was then adjourned.