Presentation of the Annual Financial Audit for the Fiscal Year Ended June 30, 2025 January 20, 2025
Your LSL Management Team
Heather Flores, CPAManager/In-Charge
Calvin Kunkel, CPAManager
Christian Townes, CPA
Partner
Ryan Domino, CPAConcurring Review
Management’s Responsibilities
The preparation and fair presentation of the financial statements in accordance with US GAAP Design and implementation of internal controls
Evaluate if there are any conditions which indicate doubt of continued financial viability Complying with the requirements of federal award programs
Auditors’ Responsibilities
Conduct the audit in accordance with:
Generally accepted auditing standards
Government Auditing Standards
Uniform Guidance
Exercise professional judgment, and professional skepticism Conduct a risk-based approach to the audit
Understand the entity’s internal control structure
Evaluate significant accounting estimates for reasonableness Evaluate if there are any conditions which indicate doubt of continued financial viability
Introductory Section
Provides a letter from management highlighting key financial information Includes an overview of the organization's structure
Summarizes major achievements and challenges during the fiscal year Presents a message on the financial health and outlook
Sets context for detailed financial statements and audit results
Financial Section
Presents detailed financial statements including balance sheet and income statement Includes notes explaining accounting policies and significant financial details Shows changes in financial position through cash flow statements Provides management’s analysis of financial performance and condition Presents detailed information on required supplementary information:
Budgetary comparison schedules for the general fund and any major special revenue funds Pension schedules
OPEB schedules
Presents other supplementary information
Combining and individual nonmajor fund statements and schedules
Statistical Section
Provides additional context and historical data to help users understand the financial statements.
Content:
Financial Trends: Shows how the government's financial position has changed over time.
Revenue Capacity: Provides information on the government's ability to generate revenue.
Debt Capacity: Offers insights into the government's debt levels and ability to issue additional debt.
Demographic and Economic Information: Includes data on the population, employment, and economic conditions.
Bond Disclosure Section: Provides information to fulfill the City’s bond continuing disclosure requirements of material events, delinquencies, and other financial data.
Audit Results – on Financials
Unmodified auditors’ opinion
Report on Internal Controls and Compliance
No material weaknesses identified
Significant deficiency and related noncompliance identified No material noncompliance identified
Change in accounting policies for GASB 101, Compensated Absences Restatements presented on the financial statements
Estimates are reasonable
Pension and OPEB liabilities
No difficulties encountered during the audit
Corrected and uncorrected misstatements:
One immaterial correcting entry identified during search for unrecorded liabilities related to an expense improperly accrued in accounts payable as of June 30, 2025.
Two entries for uncorrected immaterial transactions relating to correction of RMRA and Gas Tax recognition between fiscal years ended June 30, 2024 and June 30, 2025.
No disagreements with management
No fraud, waste, or abuse identified
Prior year finding is considered resolved
Contact Us
www.lslcpas.com
[email protected]
(949) 829-8299
Our Offices
Irvine, CA – Headquarters
500 Technology Drive, Suite 350Irvine, CA 92618
Sacramento, CA
2151 River Plaza Dr., Suite 150Sacramento, CA 95833
The Woodlands, TX
21 Waterway Avenue, Suite 30089The Woodlands, TX 77380
FISCAL YEAR 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT JANUARY 20, 2026
FINANCIAL AUDIT TIMELINE
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Single Audit required for FY 2024-2025 due to Federal Awards received being over $750,000. Single Audit to commence week of December 15.
GENERAL FUND RESULTS
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Revenue over Expenditures: $4,463,630
Transfers Out:
$15,415,471 to CIP Fund
$258,535 to Street Lighting
$266,114 to Fleet Fund
Decrease in Fund Balance: ($9,900,035)
Statement of Revenues, Expenditures, and Changes in Fund Balances – Page 33
GENERAL FUND BALANCE
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Note 18 Fund Balance– Page 89
Unassigned Fund Balance
$23,617,324
Financial Policy: 19,548,282
Economic Uncertainty: 4,000,000
Total $23,548,282
Adjusted Unassigned: 69,042
Subsequent bond issuance in August 2025 will increase the unassigned General Fund balance.
NONCURRENT LIABILITY
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Noncurrent - $133,719,806
Comp. Absences (GASB 101)
$6,551,782
POBs Payable
$77,700,000
Bonds
$20,923,361
SBITAS/Leases
$9,351,633
Claims
$19,193,031
Statement of Net Position – Page 25
CALPERS
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Net Pension Liability
$20,189,543
CalPERS Discount Rate: 6.8%
CalPERS Returns
FY 2022-2023: 5.8%
FY 2023-2024: 9.3%
Statement of Net Position – Page 25
AUDIT RESULTS
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
One Audit finding due to not recording prior year expenditures spent on COVID-related FEMA reimbursements.
Restatements due to the implementation of GASB 101 – Compensated Absences.
AUDIT RESULTS
JANUARY 20, 2026
FY 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Management Letter Recommendation:
Discontinue practice of grouping income statement accounts with fund balance groupings.
Resulting Action:
Mid-Year Budget Update will include non-budgetary transactions (e.g. depreciation) and interfund transfers within the appropriate revenue and expenditure categories to comply with best practices.
QUESTIONS
MAY 6, 2025