Temple City Council receives clean audit, staff warns one‑time gains will be spent on planned projects

Temple City Council received and filed the city’s annual comprehensive financial report for the year ended June 30, 2024, after staff said auditors issued an unmodified (clean) opinion and flagged one procedural finding.

City administrative staff told the council the audit shows the city’s financial statements were presented fairly. “Our auditors, CliftonLarsonAllen, issued an unmodified opinion,” Alex Kung, administrative services director and city treasurer, said, calling it a “clean audit.” He added the city also received a clean single‑audit for federal ARPA funds.

Staff framed the unusually large fund balance reported for the year as the product of two largely one‑time phenomena. First, roughly $5.2 million of ARPA funds were used to cover public‑safety expenditures in fiscal year 2023–24, temporarily lowering general‑fund expenses. Second, the city recorded substantial investment gains as previously depressed market values matured; staff described those gains as “to the tune of almost $2 million.” Staff said those gains and ARPA-supported costs together inflated the year‑end fund balance compared with typical years.

Kung and other staff cautioned that much of the apparent surplus has already been obligated. “You will see a significant draw down in that fund balance because you’ve made some strategic decisions on investments — new playgrounds, the city‑hall roof and other projects,” staff said, noting planned capital expenditures at Live Oak Park, the civic center and the chamber site.

Council members pressed staff on internal controls and the auditors’ role. Kung reported one audit finding related to the recording and timing of outstanding checks at fiscal year end, which he attributed to a miscommunication during a staffing transition; he said staff corrected the entries during the FY23–24 audit and will strengthen procedures going forward. Kung also said a planned upgrade to the city’s financial software (targeted for implementation in 2026) should automate year‑end processes and reduce the risk of similar timing errors.

Council asked about exposure to market volatility and whether the investment gains would persist; staff replied gains were sensitive to market conditions and that the city would maintain vigilance over ongoing revenue streams such as sales and property tax.

A council member moved to receive and file the report; the motion passed on roll call with all recorded votes in favor. The council’s action was procedural — receiving and filing the report — and did not adopt new budget authority. The administration will use the council’s direction to proceed with planned capital work and to implement tightened year‑end procedures.

The council’s next steps are administrative: staff will proceed with implementation of the upgraded financial system and continue monitoring the general fund and capital project cash flows. The council did not take additional policy action at the meeting.