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Finance commission recommends council receive Menlo Park's audited 2025 financial report after auditors flag interest-allocation error
Summary
The Menlo Park Finance and Audit Commission voted unanimously to recommend the City Council receive the city's Annual Comprehensive Financial Report for the year ending June 30, 2025; auditors issued a clean opinion but required adjustments after finding the city's interest-income allocation did not comply with GASB 31, reducing the general fund by about $1.6 million for FY2025.
The Menlo Park Finance and Audit Commission voted unanimously Jan. 15 to recommend that the City Council receive the city's Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2025.
Assistant Administrative Services Director Penny Lee told the commission that independent auditors issued an unmodified, or 'clean,' opinion on the city's financial statements. "The independent auditors issued an unmodified opinion commonly referred to as a clean audit," Lee said, calling the ACFR the city's official audited record of financial performance.
Why it matters: while the overall government-wide net position grew by about $16.1 million in 2025, auditors identified a compliance issue with how the city allocated investment earnings. The auditors found the city's practice had limited interest and unrealized-gain allocations to a subset of funds rather than allocating proportionally across all funds as GASB 31…
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