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City accepts FY 2024–25 audit; auditors issue clean opinion
Summary
Larkspur City Council received the fiscal year 2024–25 audit, which delivered an unmodified (clean) opinion. Auditors highlighted routine risks — revenue recognition, management override and pension/OPEB estimate sensitivity — and council unanimously accepted the report.
The Larkspur City Council on Dec. 3 received the fiscal year 2024–25 audit and voted unanimously to accept the auditors’ report.
Mitesh Desai, engagement partner with Badawin Associates, told the council the firm issued an unmodified opinion on the city’s basic financial statements, meaning the statements are fairly presented in all material respects. Desai summarized the audit’s scope and deliverables — the opinion on the financial statements, an internal control and compliance report, and a forthcoming ARPA examination — and said the firm found no material weaknesses in internal controls.
The auditor outlined standard areas of heightened audit risk that are common to municipal audits: management override of controls, improper revenue recognition, and significant accounting estimates — notably pension and other post‑employment benefit (OPEB) liabilities. Desai said auditors test manual journal entries, confirm significant revenues (property and sales tax) and perform analytical procedures to address those risks.
Council members pressed staff and the auditor on pension and OPEB disclosures and on what amounts represent actual cash contributions versus accounting expense. City Manager Schwarz and staff explained the city receives actuarial schedules (the city commissions an actuarial study every two years) and that the actuary’s numbers feed into the financial statements; staff provided current estimates of the city’s required payments. The council was told the net pension liability reported in the statements is about $4.2 million and that sensitivity disclosures show how materially that figure would change with a 1‑percentage‑point shift in the discount rate.
Council member Gabe Pollson asked about Measure B transfers; Amelia Gabrielle, Administrative Services Director, pointed to the audit’s Management Discussion & Analysis and to page 15 of the report showing the $2,589,000 transfer included debt principal and interest, $55,000 in administrative fees paid to US Bank, $1,350,000 in capital improvements and $141,000 toward a fire lease truck payment.
Following questions, a council member moved and the council accepted the audit report by voice vote. The motion did not record an individual mover or seconder in the transcript; the vote was unanimous.
