City audit: Benicia posts net position gain but auditors flag three material weaknesses

CliftonLarsonAllen principal Rich Gonzales presented the City's Annual Comprehensive Financial Report for the fiscal year ended 06/30/2024 and explained the audit scope and results. Gonzales said the firm issued "a modified opinion, which is a clean opinion," and summarized that the city had three material weaknesses that staff should address in internal controls.

Gonzales identified the three findings: (1) utility receivables were overstated due to an accrual that was not reversed after a system transition; (2) subscription-based IT arrangements and leases (subSOPAs/subIDAS) required improved review and completeness checks; and (3) the Schedule of Expenditures of Federal Awards (SEFA) contained amounts that did not belong and required staff training. He also reported modified opinions on compliance and internal controls for major federal programs under the single-audit rules.

Accounting Manager Patricia McKeever told the council that total net position "increased $8,700,000," with corrections including a $1.9 million reduction in Water and Wastewater fund receivables following reconciliations. McKeever described corrective actions: reversing the stale accrual, implementing reconciliations between aging reports and the general ledger, assigning closer staff review of lease entries, training the staff member responsible for SEFA preparation, and deploying Project Ledger and grant-management modules in Tyler to improve tracking and reporting. The council voted unanimously to accept the ACFR.