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Portola Valley finance committee reviews clean FY2022–23 audit, staff outlines control fixes
Summary
Town staff reported a clean audit opinion for FY2022–23 but flagged lingering internal-control items and multi‑year audit delays; Treasurer Tony said corrective actions are underway and council will be asked to accept the audited statements.
The Portola Valley Finance Committee heard a presentation on the town’s FY2022–23 audited financial statements and a treasurer’s report at its June committee meeting. The auditor issued an unmodified, or "clean," opinion, but staff and committee members discussed delayed audit timing, a drop in net position and a new internal-control finding concerning untimely removal of separated bank signers.
The auditor’s clean opinion covers the fiscal year ending June 30, 2023, but Tony said the town’s total net position decreased by $1.6 million and the general fund decreased by $1.26 million. "We did receive an unmodified or clean opinion on our financial statements for fiscal year 223," Tony told the committee. He summarized the memorandum of internal controls and noted one new finding: that bank authorizations for departed employees were not removed in a timely fashion during periods of staff turnover.
Committee members pressed staff on the causes and why multi‑year audit delays occurred. Several members cited staff turnover, parallel accounting systems, and delayed posting of receipts and journal entries as contributors. One member said they had filed a public-records request to learn cash balances after finding signature authority still assigned to a manager who had left; a resident and commenter, Rita, said the public has been asking about the audits since 2020 and urged clearer, faster reporting.
Tony described the town’s remediation sequence: bring current-year posting up to date first, then complete historical audits so auditors can verify implementations and clear prior findings. He said a resolution to update authorized signers for the Bank of America account will be presented to council in June to address the new finding.
On cash and fund balances, Tony reported about $25.5 million in bank accounts across TechCU, Bank of America, LEF and Schwab, with a general fund cash balance of roughly $2.4 million and a general‑fund reserve of about 32.81% (above the 20% target). Restricted funds include an open‑space fund of approximately $10.4 million and an inclusionary in‑lieu fund of about $5.2 million. Year‑to‑date the general fund is running a deficit of about $216,000; total fund balances across all funds showed a year‑to‑date increase.
The committee moved to recommend that the town council accept the FY2022–23 audited financial statements; the motion was seconded and taken by voice vote. Staff said the FY2022 and FY2023 audit reports will be posted on the town’s finance page following council action, and that treasurer’s reports will be posted regularly (staff’s goal is monthly reports, with a minimum quarterly cadence).
The committee and public speakers emphasized the importance of timely audits and improved internal controls as a foundation for fiscal transparency. The committee scheduled follow‑up work in coming meetings to track audit completion and the posting of financial reports to the town website.
The committee then moved on to a separate discussion of the town’s structural deficit and possible revenue measures.
