City audit delivers clean opinion but flags two internal-control findings, auditor says

An independent auditor told the Desert Hot Springs City Council on Feb. 4 that the city's fiscal year 2023–24 financial statements received an unmodified ("clean") opinion, but the audit identified two formal findings related to internal control and compliance.

Sofia Co, the engagement partner presenting the audit, summarized the scope and key figures: the city's net position totaled about $71.4 million at year end, up roughly $11.4 million from the prior year; program revenues were about $33.8 million versus expenses of about $44.8 million, producing a net cost of service of roughly $10.9 million. The auditor said the general fund balance ended at about $7.6 million and noted transfers and other financing uses during the period. Pension-related figures were discussed: the city's CalPERS miscellaneous and safety plans showed net pension liabilities and funding ratios in the range presented in the written report.

Although the opinion was unmodified, the audit report contained two formal findings: one concerning internal control over financial reporting and procurement processes, and a second concerning compliance with affordable-housing expenditure reporting and related controls. The auditor recommended reviewing and strengthening procurement documentation and compliance monitoring; full details and recommendations are included in the published audit package.

Council members asked clarifying questions and asked staff to consider the auditor's recommendations; staff said management is aware of the items and is working to build reserves and improve controls. The council received the audit report and had no further public comments on the presentation.