Independent auditors give Richmond a clean opinion on FY2024–25 financials; council receives report unanimously

Richmond’s independent auditor Badawi & Associates presented the city’s annual comprehensive financial report for the fiscal year ended June 30, 2025, and issued an unmodified opinion — commonly known as a clean opinion — at the March 3 City Council meeting.

Audit partner Ahmed Badawi summarized the audit scope and key figures: the general fund closed with an unassigned balance of approximately $62.8 million (about 24% of next year’s planned spending), exceeding the city’s 21% reserve policy. Badawi cautioned that long-term liabilities — notably pension and other post-employment benefits (OPEB) — remain the major drivers of negative unrestricted net position; he illustrated how a 1-percentage-point change in discount assumptions could materially alter pension liability estimates.

The auditors reported no material weaknesses in internal control, noted the audit was substantially complete in a timely fashion, and described routine audit adjustments that management agreed to post. For the Richmond Housing Authority and affiliated housing entities, the auditor disclosed a disclaimer of opinion because those audits remain in process and the 2025 information was not available.

Council members asked detailed questions about grant auditing, timing of revenue recognition, and fund deficits that stem from reimbursement timing; auditors and finance staff explained that negative fund balances largely reflect grant-funded activity awaiting reimbursement and that staff are addressing those items.

After the presentation and Q&A, Council voted unanimously to receive the audit report.