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Lompoc Council accepts FY24–25 audit; auditors issue clean opinion but note one significant deficiency
Summary
City auditors issued an unmodified opinion on the FY24–25 financial statements but noted one significant internal‑control deficiency; council asked staff for follow-up on receivables, restricted funds, a $944,000 credit‑card fee impact, and pension obligations, and accepted the report 5–0.
The Lompoc City Council accepted the FY24–25 comprehensive annual financial report and audit on March 3 after a presentation by auditors from LSL and the city’s finance staff. The auditors issued an unmodified (clean) opinion but reported one significant deficiency in internal controls and noted no material weaknesses.
Auditors’ summary: Riley Greenlee of LSL described a risk‑based audit approach and said the audit was performed under GAAS, government auditing standards and uniform guidance where applicable. He told the council the audit resulted in an unmodified opinion; however, the team issued a management letter outlining a single significant deficiency and provided corrective recommendations. “We issued an unmodified auditors opinion,” Greenlee said.
Key fiscal findings and council follow-up: Finance staff (Bob Cross and team) presented fund results: water expenses exceeded revenues in FY24–25 and a rate study is underway; electric operations have revenues greater than expenditures; solid‑waste operations are short of expenditures. Staff explained that a change in cost‑allocation methodology increased charges for services by roughly $3 million in reporting. Cross said operating grants and capital grants increased materially and that property tax and sales tax were largely stable year over year.
Council members pressed staff for follow up on several items: the aging of roughly $11.3M in receivables across utilities and the need to present past‑due detail at the midyear review; the composition of the fund balance and restricted funds; and pension and OPEB liabilities (staff noted total pension liability rose to about $250M while plan assets also grew). Council also discussed a prior spike in credit‑card fees (almost $1.6M in a prior period) that has since been renegotiated down to about $500k annually; the council asked the city attorney to research potential remedies related to a $944,000 expense that required further legal review.
Outcome and next steps: Council accepted the report and directed staff to bring midyear breakdowns and more detailed information on receivables, restricted funds, and debt/service schedules to upcoming meetings. The council also asked for follow-up on internal control recommendations in the auditor’s management letter.
