Staff Report re FY23-24 Auditor’s Report Page 1 of 5
STAFF REPORT
T
O: Mayor and Members of the City Council
FROM: Sabrina Lee, Accounting Manager
VIA: Dan Barros, City Manager
MEETING DATE: July 9, 2025
SUBJECT: FY 2023-24 Audited Financial Statements and Reports R
ECOMMENDATION
Staff recommends that the City Council adopt the following:
RESOLUTION ACCEPTING AUDITOR'S REPORTS AND FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING JUNE 30, 2024, PURSUANT TO CEQA GUIDELINE 15378
COUNCIL ADOPTED VALUES
A
pproval of the attached resolution is consistent with the Council's core value of responsibility because the annual audit process provides an objective, expert assessment of the Town's financial condition and financial reporting process.
BACKGROUND
The Town's financial statements are prepared in accordance with the generally accepted accounting principles (GAAP) and reporting requirements of the Governmental Accounting Standard Board (GASB).
For Fiscal Year ending June 30, 2024, the Town engaged O'Connor & Company formerly R.J.
Ricciardi, CPA to conduct an independent audit and review of the Town's financial statement for the fiscal year ending June 30, 2024. The audit includes the agreed-upon procedures, review, and audit of various reports. The Auditor's opinion on the following reports are attached as B through F.
• The Basic Financial Report for FY 2023-24,
• Management Report for FY 2023-24,
• Measure A Fund Component Unit Financial Statements for FY 2023-24, AGENDA ITEM #4
Staff Report re FY23-24 Auditor’s Report Page 2 of 5
• Measure W Fund Component Unit Financial Statements for FY 2023-24, and • Appropriations Limit Calculation for FY 2023-24.
A representative from the firm will be at the Council meeting to present the audit and answer any questions the Council may have.
ANALYSIS
Overall, the Town received a "clean" audit for FY 2023-24 with no adverse findings or recommendations. As part of the audit, O'Connor and Company also assessed the Town's internal control and noted in Attachment C, FY 2023-24 Management Report that they did not find any observations.
FY 2023-24 Audited Financial Report
The FY 2023-24 Audited Financial Report is organized in four main sections, see below. All sections have been prepared in accordance with Generally Accepted Accounting Principles (GAAP) and relevant rules established by the Governmental Accounting Standard Board (GASB).
Introductory Section has the Table of Contents, Town Officials, and Town Organization Chart. The FY 2023-24 Financial Report does not include a transmittal letter, as it is embedded in the MD&A.
Financial Section contains the Independent Auditors' Report, Management's Discussion & Analysis (MD&A), Basic Financial Statements, and Notes to Basic Financial Statements.
Independent Auditors' Report (p. 1-2) summarizes the auditors' responsibility regarding the financial statements, their audit opinion, and other matters and information in the Financial Report. As stated above, the Town received a "clean" audit for FY 2023-24.
Management Discussion & Analysis (MD&A) (p. 3-9) provides highlights on the Town's financial condition, overall economic conditions, and a FY 2023-24 Budget overview.
Basic Financial Statements (p. 10-17) presents the Town's FY 2023-24 finances as dictated by GAAP. This section begins with Governmental-Wide financial statements (p. 10-11) where the financial information within the Fund Financial statements (p. 12-17) are consolidated and adjusted in accordance with GAAP. Reconciliations from the Fund level to Governmental-Wide level can be found on page 14. Additional information on Governmental-Wide and Fund Financial Statements can be found on page 18 (NOTE 1B).
The Fund Financial Statements also presents General Fund, Capital Projects Fund as Major Funds. Non-major funds are combined and presented as "Other Governmental Funds" (p. 12- 13) and in the Supplementary Information Section (p. 53-54).
Notes to the Basic Financial Statements (p. 18-44) provides additional information about the Basic Financial Statements. This includes explanation of the basis of accounting and various Staff Report re FY23-24 Auditor’s Report Page 3 of 5
accounting terms. It also includes debt schedules, background information on pension and OPEB, and other pertinent information needed to understand the Basic Financial Statements.
Required Supplementary Information includes General Fund budgetary comparison (p. 45), Pension and OPEB schedules (p. 47-52), and Balance Sheet and Schedule of Revenues, Expenditures and Changes in Fund Balance for Non-major governmental funds (p. 53-54).
Key Notes and Changes
Town Hall Renovation Project Financing
On September 24, 2015, the Town completed a Certificates of Participation (COP) financing of $5.3 Million to fund a portion of the Town Hall Renovation Project. The proceeds from this financing were placed in a separate fund. The net liability as of June 30, 2024, in this fund was $4,160,000. (See Note 4E page 30).
Retirement Liabilities
This is the tenth year of the requirement to incorporate additional information on retirement plan liabilities as required by Government Accounting Standards Board (GASB) statement No.
68. (See Note 5C on pages 33-38). As shown on page 30, the Net Pension Liability decreased by $85,000 from $12.7 Million in the prior year to an ending balance of $12.6 million as of June 30, 2024.
Retiree Medical and Dental (OPEB) Liabilities
This is the seventh year of the requirement to incorporate additional information on retirement plan liabilities as required by Government Accounting Standards Board (GASB) statement No.75. (See Note 7 on pages 40-44). As shown on page 30, the Net OPEB Liability decreased by $751,000 from $11.2 Million in the prior year to an ending balance of $10.5 million as of June 30, 2024. Previously, OPEB liabilities were offset by contributions. With the implementation of GASB 75, OPEB liabilities and additional contributions are recorded separately, showing the estimated future OPEB debt.
Other Reports
Management Report
As part of the Audit process the Auditors also review procedures and make recommendations on improvements as part of a Management Report (See Attachment C). The Auditors did not make any reportable findings with the current year work.
Measure A Transportation Funds
The Town receives $72,055 per year in Measure A Transportation Funds from San Mateo County. The Measure A Program requires the Town to complete a separate audit of these funds (See Attachment D). In addition to financial testing of transactions, the Auditors do additional Staff Report re FY23-24 Auditor’s Report Page 4 of 5
review to provide a reasonable assurance that the Town of Colma has complied with certain provisions of Measure A.
No Measure A expenditures were made by the Town in FY 2023-24. The balance available in the Measure A Fund as of June 30, 2024 is $180,671.
Measure W Transportation Funds
The Town receives $31,930 per year in Measure W Transportation Funds from San Mateo County. The Measure W Program requires the Town to complete a separate audit of these funds (See Attachment E). In addition to financial testing of transactions, the Auditors do additional review to provide a reasonable assurance that the Town of Colma has complied with certain provisions of Measure W.
No Measure W expenditures were made by the Town in FY 2023-24. The current fund balance is $97,067. Staff will allow the fund to accumulate until it is sufficient to be used for a capital project.
Appropriations Limit
Annually the Town is required to calculate an Appropriations Limit which is presented in the Budget and adopted by the Council. State Law does not require an "Audit" of the proceeds of taxes, but does require a review completing specific procedures. This review was completed by the Auditors with no exceptions being noted (See Attachment F).
Reasons For the Recommended Action/Findings
Acceptance of the FY 2023-24 audited/reviewed financial statements and reports will authorize Staff to publish and distribute them to various interested parties and ensure compliance with the Town's debt issuance requirements.
FISCAL IMPACT
This is for reporting purposes. No fiscal impact.
ALTERNATIVES
None. In addition to supporting good governance, the completion of the Audited Financial Statements is a requirement of the Certificate of Participation (COP) debt issuance and rules imposed by the SEC.
CONCLUSION
Staff recommends the City Council receive the presentation from the Town’s auditor, then adopt a resolution accepting the Auditor’s reports for Fiscal Year 2023-24
Staff Report re FY23-24 Auditor’s Report Page 5 of 5
ATTACHMENTS
A. Resolution - Accepting Auditor Reports for FY 2023-24 B. FY 2023-24 Basic Financial Reports
C. FY 2023-24 Management Report
D. FY 2023-24 Measure A Fund Component Unit Financial Statements E. FY 2023-24 Measure W Fund Component Unit Financial Statements F. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheet
ATTACHMENT A
RESOLUTION NO. 2025-##
OF THE CITY COUNCIL OF THE TOWN OF COLMA
RESOLUTION ACCEPTING AUDITOR'S REPORTS AND
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING JUNE 30, 2024, PURSUANT TO CEQA GUIDELINE 15378
The City Council of the Town of Colma does hereby resolve as follows:
1. Background
(a) For Fiscal Year ending June 30, 2024, the Town engaged O'Connor & Company formerly R.J. Ricciardi, CPA to conduct an independent audit and review of the Town's financial statement for the fiscal year ending June 30, 202 4.
(b) Overall, the Town received a "clean" audit for FY 202 3-24 with no adverse findings or recommendations. As part of the audit, O' Connor and Company also assessed the Town's internal control and noted in Attachment C, FY 2023-24 Management Report that they did not find any observations.
2. Order
(a) The City Council hereby accepts the Auditor's reports and Financial Statements for Fiscal Year 2023-24.
Certification of Adoption
I certify that the foregoing Resolution No. 202 5-# # was duly adopted at a regular meeting of the City Council of the Town of Colma held on July 9, 2025, by the following vote:
Name Voting Present, Not Voting Absent
Aye No Abstain Not Participating
Ken Gonzalez, Mayor
Carrie Slaughter
Helen Fisicaro
Joanne F. del Rosario
Thomas Walsh
Voting Tally
Dated:
Ken Gonzalez, Mayor
Attest:
Michelle Estabillo, City Clerk
Res. 2025-##, Auditor's Report Fiscal Year 2023-24 Page 1 of 1
ATTACHMENT B
1701 NOVATO BLVD, SUITE 302
NOVATO, CA 94947
PH. (415) 457-1215
FAX. (415) 457-6735
www.maocpa.com
ATTACHMENT C
1701 NOVATO BLVD, SUITE 302
NOVATO, CA 94947
PH. (415) 457-1215
FAX. (415) 457-6735
www.maocpa.com
1701 NOVATO BLVD, SUITE 302
NOVATO, CA 94947
PH. (415) 457-1215
FAX. (415) 457-6735
www.maocpa.com
ATTACHMENT D
1701 NOVATO BLVD, SUITE 302
NOVATO, CA 94947
PH. (415) 457-1215
FAX. (415) 457-6735
www.maocpa.com
ATTACHMENT E
1701 NOVATO BLVD, SUITE 302NOVATO, CA 94947 PH. (415) 457-1215 FAX. (415) 457-6735 www.maocpa.com
ATTACHMENT E
1701 NOVATO BLVD, SUITE 302NOVATO, CA 94947 PH. (415) 457-1215 FAX. (415) 457-6735 www.maocpa.com
1701 NOVATO BLVD, SUITE 302
NOVATO, CA 94947
PH. (415) 457-1215
FAX. (415) 457-6735
www.maocpa.com
ATTACHMENT F