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Placerville receives clean FY2024-25 audit but auditors report three significant deficiencies
Summary
City auditors issued an unmodified (clean) opinion on Placerville's FY2024-25 financial statements and single-audit; the auditors reported no material weaknesses but identified three significant deficiencies (untimely bank reconciliations, accounts-receivable revenue recognition error, and delays in financial reporting). The city's net pension and OPEB liabilities were highlighted in the presentation.
Placerville city staff presented the FY2024-25 audited financial statements on July 14 and told the council the independent auditors issued an unmodified (clean) opinion for both the financial-statement audit and the federal single-audit.
Ms. Tornikasa presented highlights from the PUN Group audit: the city reported $99 million in assets and a net position of about $74 million (an increase of approximately $2.5 million from the prior year). The general fund had an unassigned fund balance of about $4.0 million as of June 30, 2025; staff warned some of that balance may be restricted and noted planned draws for the 681 Main Street purchase and renovations. For FY2025 the auditors reported program revenues of roughly $10.3 million and expenses around $21 million (governmental activities), with a net-cost-of-service result offset by general revenues.
The auditors reported no corrected or uncorrected misstatements and no material weaknesses. They did, however, report three significant deficiencies: (1) untimely bank reconciliations and lack of timely review and approval, (2) an accounts-receivable revenue-recognition error related to grant revenue (including some SRO grants becoming uncollectible), and (3) delays in financial reporting and year-end close processes. Ms. Tornikasa said the city has begun addressing these items (monthly bank reconciliations to be completed by the 21st of each month, a recently hired accountant and tightening year-end processes).
The single audit of federal expenditures (about $4.4 million) also resulted in an unmodified opinion. Ms. Tornikasa and council members discussed pension and OPEB figures: the city's net pension liability was reported at about $24 million, with funded ratios below peer averages, and the OPEB liability was about $3.9 million. Staff said actuarial assumptions and sensitivity analyses were provided by the actuary, Foster & Foster.
Council members congratulated staff for completing the audits and for work to address the significant deficiencies. The council voted to receive and file the financial and audit reports.
Why it matters: a clean audit opinion affirms the city's year-end financial statements are presented fairly in all material respects; the significant deficiencies identify internal-control and reporting areas the city must address to improve timely reporting and grant-revenue recognition.
