City of Santa Clarita
Santa Clarita, California
Single Audit and
Independent Auditor’s Reports
For the Year Ended June 30, 2025
City of Santa Clarita
Single Audit and Independent Auditor’s Reports
For the Year Ended June 30, 2025
Table of Contents
Page
Independent Auditor’s Reports:
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...................................................................... 1
Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ....................................................... 3
Schedule of Expenditures of Federal Awards .................................................................................... ........................... 7
Notes to the Schedule of Expenditures of Federal Awards ........................................................................................... 8
Schedule of Findings and Questioned Costs ................................................................................................................ 10
This page intentionally left blank.
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
REPORT ON INTERNAL CONTROL OVER FI
NANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and the Members of City Council
of the City of Santa Clarita
Santa Clarita, California
We have audited, in accordance with the auditing standa rds generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (“ Government Auditing Standards ”), the financial statemen ts of the governmental activities, the business-type activities, each major fund, and th e aggregate remaining fund information of the City of Santa Clarita, California (the “City”), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 12, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial stat ements, we considered the City’s internal control over financial reporting (“internal control”) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s inte rnal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assi gned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significan t deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any defi ciencies in internal control that we consider to be material weaknesses. We identified certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item 2025-001 that we consider to be significant deficiencies.
To the Honorable Mayor and the Members of City Council
of the City of Santa Clarita
Santa Clarita, California
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct a nd material effect on the fina ncial statements. However, providing an opinion on compliance with those provisions w as not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
The City’s Response to Findings
Government Auditing Standards require auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanyi ng Schedule of Findings and Questioned Costs. City’s response was not subject to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entit y’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Santa Ana, California
December 12, 2025
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM;
REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
Independent Auditor’s Report
To the Honorable Mayor and the Members of City Council
of the City of Santa Clarita
Santa Clarita, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Santa Clarita, California’s (the “City”) compliance w ith the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for th e year ended June 30, 2025. The City’s major federal programs are identified in the summary of the auditor’s results section of the accompanying Schedule of Findings and Questioned Costs.
In our opinion, the City complied, in all material respect s, with the compliance require ments referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with a uditing standards generally accepted in the United States of America (“GAAS”); the standards appli cable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States (“Government Auditing Standards ”), and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be indepe ndent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis fo r our opinion on compliance for each ma jor federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for comp liance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.
To the Honorable Mayor and the Members of City Council
of the City of Santa Clarita
Santa Clarita, California
4 Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a hi gh level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncomp liance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we
exercise professional judgment and maintain professional skepticism throughout the audit.
identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Su ch procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstan ces and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficienci es and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal c ourse of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of complian ce requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combinati on of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal progr am will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet im portant enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose d escribed in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designe d to identify all deficiencies in internal control over compliance that might be material weaknesses or signi ficant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were no t identified.
To the Honorable Mayor and the Members of City Council
of the City of Santa Clarita
Santa Clarita, California
5 Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activiti es, the business-type activities, each major fund, and the aggregate remaining fund informa tion of the City as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 12, 2025, which contained unmodified opini ons on those financial statements. Our audit was conducted for the purpose of forming opinions on th e financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Uniform Guidance and is not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financ ial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and ot her additional procedures in accordance with GAAS. In our opinion, the Schedule of Expenditure of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
Santa Ana, California
December 12, 2025
6 This page intentionally left blank.
City of Santa Clarita
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2025
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 7 Assistance Agency or
Federal Grantor/Pass-Through Grantor Listing Pass-Through Federal Expenditures Program Title Number Number Expenditures to Subrecipients U.S. Department of Housing and Urban Development
Community Development Block Grant Cluster Entitlement/
Special Purpose Grants
Direct Programs:
Community Development Block Grants/Entitlement Grants 14.218 B-22-MC-06-0576 $ 707,936 $ 707,936 Community Development Block Grants/Entitlement Grants 14.218 B-23-MC-06-0576 1,275,153 1,275,153 Community Development Block Grants/Entitlement Grants 14.218 B-24-MC-06-0576 721,224 444,482 COVID-19 - Community Development Block Grants/Entitlement Grants - CARES Act 14.218 B-20-MW-06-0576 218,960 218,959 Total Community Development Block Grant/ Entitlement Grants 14.218 2,923,273 2,646,530 Total Community Development Block Grant Cluster Entitlement/ Special Purpose Grants 2,923,273 2,646,530
Total U.S. Department of Housin g and Urban Development 2,923,273 2,646,530 U.S . Department of Justice
Direct Program:
Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-24-GG-04646-JAGX 20,317 - Total U.S. Department of Justice 20,317 -
U.S. Department of Transportation
Pass-through the State of California Department of Transportation:
Highway Planning and Construction (Federal-Aid Highway Program) 20.205 STPLR 130L(305) 528 - Highway Planning and Construction (Federal-Aid Highway Program) 20.205 BHLS-5450(101) 53,567 - Highway Planning and Construction (Federal-Aid Highway Program) 20.205 DEML22-5450(104) 1,118,990 - Total Highway Planning and Construction
(Federal-Aid Highway Program) 20.205 1,173,085 - Federal Transit Cluster
Direct Programs:
Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-90-Y276-02 157,838 - Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-2017-138-00 77,292 - Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-2019-125-00 790,124 - COVID-19 - Federal Transit - Formula Grants
(Urbanized Area Formula Program) 20.507 CA-2021-138-00 825,559 - Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-2021-193-00 1,396,694 - COVID-19 - Federal Transit - Formula Grants
(Urbanized Area Formula Program) 20.507 CA-2022-125-00 10,903,902 - Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-2022-167-00 508,582 - Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-2023-074-00 26,983 - Federal Transit - Formula Grants (Urbanized Area Formula Program) 20.507 CA-2023-132-00 882,943 Total Federal Transit - Formula Grants (Urbanized Area
Formula Program) 20.507 15,569,917 -
Total Federal Transit Cluster 15,569,917 -
Total U.S. Department of Transportation 16,743,002 - U.S . Department of the Treasury
Direct Program:
COVID-19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 1505-0271 133,192 - Total U.S. Department of the Treasur y 133,192 - Total E xpenditures of Federal Awards 19,819,784$ 2,646,530 $
City of Santa Clarita
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2025
8 Note 1 – Reporting Entity
The financial reporting entity, as defined by the Governme ntal Accounting Standards Board (“GASB”) Codification, consists of the primary government, whic h is the City of Santa Clarita, California (the “City”), organizations for which the primary government is financially accountable , and other organizations for which the nature and significance of their relationship with the primary governme nt are such that exclusion would cause the City’s financial statements to be misleading or incomplete.
The City Council acts as the governing body and is able to impose its will on the following organization, establishing financial accountability:
The Santa Clarita Public Financing Authority
The Santa Clarita Public Television Authority
Note 2 – Summary of Significant Accounting Policies
Basis of Accounting
Funds received under the various grant programs have been r ecorded within the special re venue funds and enterprise fund of the City. The City utilizes the modified accrual basis of accounting for the special revenue funds and the accrual basis of accounting for the enterprise fund. The acco mpanying Schedule of Expenditures of Federal Awards (the “Schedule”) is presented in accordan ce with the requirements of Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Therefore, some amount s presented in the Schedule may differ from amounts presented in, or used in, the preparation of City’s basic financial statements.
Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of all fe deral financial assistance programs of the City. Federal financial assistance received directly from federal agencies, as well as federal financial assistance passed through the State of California Department of Transportation, are incl uded in the Schedule. The Schedule was prepared from only the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City.
Indirect Cost Rate
The City did not elect to use the 10% de minimis cost rate.
City of Santa Clarita
Notes to the Schedule of Expenditures of Federal Awards (Continued) For the Year Ended June 30, 2025
9 Note 3 – Subrecipients
During the year ended June 30, 2025, the City has the following subrecipients:
Assistance Amount Provided
Listing Number Program Name / Subrecipient Name to Subrecipients
14.218 Community Development Block Grants / Entitlement Grants:
Handyworker / Santa Clarita Valley Committee on Aging 446,732$ Project Special Children of the Valley / Carousel Ranch Inc. 10,644 Ready to Work/Carousel Ranch Inc. 13,302
Transportation for Disabled Adults/Avenues Supported Living Services 28,768 CDBG-CV Scholarship Program/ Santa Clarita Valley Boys and Girls Club 26,500 CDBG-CV Low-Mod Income Household Support/Family Promise of Santa Clarita Valley 31,861 The Study Place/Fostering Youth Independence 23,470
Rent and Utility Assistance Program/The Salvation Army 50,000 Virtual Assistance Program/Single Mothers Outreach 19,422 Child Care Scholarships/Santa Clarita Valley Family YMCA 38,939 Low-Mod Income Household Support/Family Promise of Santa Clarita Valley 34,783 Case Management / Fostering Youth Independence 40,835
Community Access Services/ Santa Clarita Valley Committee on Aging 37,895 Homeless Intake and Assessment / Bridge To Home 54,665
Mental Health for Single Parents and their Children/Single Mothers Outreach, Inc. 29,802 Design/Build Play Area At Valencia Glen Park 526,612
Old Orchard Park Phase I Improvement Project 1,232,300
2,646,530$
City of Santa Clarita
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
10 Section I – Summary of Auditor’s Results
Financial Statements
Types of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiency(ies) identified? 2025-001
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major federal programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None Reported
Type of auditor’s report issued on compliance for major federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No
Identification of major federal programs:
Assistance Listing Federal
Numbers Major Federal Program or Cluster Expenditures
20.507 Federal Transit Cluster 15,569,917 $
Total E xpenditures of All Major Federal Programs 15,569,917$ Total E xpenditures of Federal Awards 19,819,784$
Percent of Total E xpenditures of Federal Awards 78.56%
Dollar threshold used to distinguish between type A and type B programs: $750,000
Auditee qualified as a low-risk auditee in accordance with 2 CFR 200.520? Yes City of Santa Clarita
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2025
11 Section II – Financial Statement Findings
A. Current Year Findings – Financial Statement
Finding 2025-001: Internal Control Over Financial Reporting – Prior Period Adjustments
Criteria:
Management is responsible for the preparation and fair presentation as well as the accuracy of its financial statements including disclosures in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. As part of satisfyi ng that responsibility, management should ensure complete year-end closing and diligently produce reliable and accurate financial information.
In essence, accounting policies and procedures would aid the City in providing training for accounting personnel, communicating and providing a source of reference to approved policies, and ma intaining consistency of recording financial transactions.
Condition:
During the year ended June 30, 2025, the City reported prior period adjustments to the governmental activities beginning net position due to corrections to the developer credit in the amount of $14,166,245 and California Energy Commission 2024 loan in the amount of $2,700,000.
Cause:
The City did not have formal policies and procedures for communicating, reconciling, and reviewing the B&T credit issued and used. In addition, there was ineffective review of account coding when the debt proceed was initially received in the prior year as other revenue instead of other financing sources.
Context and Effect:
Prior period adjustments were reported in the financial statements for the year ended June 30, 2025.
Recommendation:
We recommend that the City improve its review processes over developer cred it and proceed from loan to ensure they are thoroughly reviewed and accurately recorded.
Views of Responsible Officials:
The City concurs the finding.
Bridge and Thoroughfare (B&T) Credits
During Fiscal Year 24/25, Finance staff identified bridge and thoroughfare credits recorded on the City’s financial statements did not reconcile with the Traffic Division’s records. When identified, staff immediately conducted an internal review of all bridge and thoroughfare credits. As a part of the review and analysis, staff identified bridge and thoroughfare credits were oversta ted by a net amount of $14,166,242. The City immediately took several actions to implement additional procedures and controls to ensure accuracy is maintained going forward.
City of Santa Clarita
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2025
12 Section II – Financial Statement Findings (Continued)
A. Current Year Findings – Financial Statement (Continued)
Finding 2025-001: Internal Control Over Financial Reporting – Prior Period Adjustments (Continued)
Views of Responsible Officials: (Continued)
Bridge and Thoroughfare (B&T) Credits (Continued)
These include: 1) A new master B&T tracking matrix w as developed and will be maintained by Traffic on an ongoing basis; 2) Public Works will ge nerate an annual fiscal year end record to certify credit balances are accurate; 3) A new electronic Laserfiche form was deve loped to establish a formal workflow that includes date/time stamps and email reminders to prevent an abandoned form, whereby Finance acknowledges the issuance/usage/transfer of credits prio r to Public Works signing a letter to the developer certifying the action, followed by Finance assigning a journal entry number confirming the credit was recorded in the City’s financial system, completing the workflow; and 4) Finance has added a line item to its year-end audit task list, requiring a positive, signed confirmation from Public Works staff, (Transportation Planning Analyst, Assistant City Engineer, and Director of Public Works) certifying B&T credit balances are accurate for each fiscal year.
California Energy Commission Loan
Additional internal training has been provided to Finan ce staff. Staff have also attended California Society of Municipal Finance Officers’ (CSMFO) trainings including the Annual Weekend Training Seminar. Staff will be attending various upcoming we binars focused on governmental accounti ng and municipal financing, as well as training sessions at the annual CSMFO conference. A line ite m has been added to Finance’s year-end audit task list, requiring staff review and evaluate unique transactions, including debt issuance, to ensure the transactions are properly recorded. A note is also included for staff to c onfirm all unique transactions are accurately booked with the City’s auditors during annual audit, prior to report issuance.
B. Prior Year Findings – Financial Statement
No prior year findings were reported.
City of Santa Clarita
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2025
13 Section III – Federal Award Findings and Questioned Costs
A. Current Year Findings and Questioned Co sts – Major Federal Award Program Audit
No current year findings were reported.
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit
No prior year findings were reported.
14 This page intentionally left blank.