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Placerville receives clean FY 2024-25 audit but auditors cite three significant deficiencies
Summary
The city's independent auditors issued an unmodified opinion for FY 2024-25 and for the federal single audit, but reported three significant deficiencies: untimely bank reconciliations, accounts-receivable revenue recognition errors dating to 2024, and delays in financial reporting; staff described corrective steps and a new accountant hire.
A representative presenting for the PUN Group gave the council an overview of the FY 2024-25 financial audit and single (federal) audit. The auditors issued an unmodified (clean) opinion for both the financial statements and the single audit covering $4.4 million in federal expenditures.
Key figures presented: governmental net position was reported at $74 million (about $2.5 million increase year over year) with capital assets of roughly $75 million, while the general fund had a fund balance of about $4.2 million (unassigned $4.1 million). Program revenues and expenses left a net cost of service for governmental activities of roughly $10 million before general revenues and transfers. The auditors and staff reviewed pension and OPEB liabilities: net pension liability reported about $24 million with funded ratios (miscellaneous 63%, safety 69%), and OPEB liability about $3.9 million. The presentation included sensitivity analysis of discount-rate and medical-cost assumptions.
The auditors reported no material weaknesses but identified three significant deficiencies: (1) internal control over financial reporting including untimely bank reconciliations and lack of review and approval; (2) an error correction related to accounts-receivable and revenue recognition tied to 2024 grant accounting; and (3) delays in financial reporting. City staff said corrective steps are underway: a new accountant has been hired, monthly bank reconciliations will be completed and signed by the director by the 21st of each month, and management has started year-end close activities for 2026.
Council members thanked staff for addressing the issues quickly but noted that sound audits do not eliminate broader fiscal challenges. The council received and filed the audit materials by motion and vote.
Why it matters: An unmodified opinion signals the financial statements present fairly in all material respects, but the significant deficiencies highlight internal-control and timing issues the city must fix to maintain accuracy in grant accounting and monthly reporting.
Next steps: Staff will implement the corrective actions described and provide midyear or more frequent financial reports to council as recommended.
