Auditor outlines focused examination of Measure I funds, schedules October report

An independent auditor told the committee the city has engaged an examination of management’s assertions for the Measure I program that will focus specifically on revenues and expenditures for the fiscal year July 1, 2025, through June 30, 2026. The presenter described the engagement as a targeted review under what the speaker referred to as “ATEST standards,” not a full financial statement audit.

The presenter said the work will include planning, testing and a concluding report: “we will test controls as well as perform year‑end substantive procedures on the revenues and expenses to ensure that they are appropriately reported,” the presenter said. Deliverables will include an independent accountant’s report and a schedule of revenues and expenditures prepared with the city’s trial balance.

The auditor explained the purpose: the examination will evaluate whether “management has recognized revenues and expenses in compliance with city ordinance as well as the adopted budget,” and will issue an opinion on whether that assertion is fairly stated once testing is complete. The presenter cautioned that the example report shown during the meeting represents what the final opinion might look like but that the actual conclusion depends on work performed.

Committee members asked technical questions about materiality and sampling. The presenter said the engagement will rely on sampling rather than reviewing all transactions and described quantitative and qualitative materiality: the quantitative threshold is typically 1–5% of a chosen benchmark (in this engagement, total expenditures), while qualitative considerations can elevate issues that matter to committee decision‑making. “In a first‑year engagement like this — this program has never been audited before — materiality is going to be a lot lower,” the presenter said, adding that the threshold for this initial review will likely fall in the 1–2% range.

On schedule, the presenter said planning and risk assessment are underway, work with the finance department will continue, substantive testing is planned for August and September, reporting work with finance is expected in September, and the auditor plans to return to the committee with a final report in October. Committee members recorded there were no public comments on the item and agreed to meet after the October report to review findings.

The next procedural step is the audit work in August–September and the auditor’s report in October; the committee will reconvene following delivery of that report. No motions or votes were recorded on this item during the meeting.