PRESENTATION TO THE
FINANCE AND
GOVERNMENTAL
OPERATIONS COMMITTEE OF
THE CITY OF TORRANCE
March 12, 2026
1 Scope of Services 2
Independence 3
Summary of Audit Results 4
Financial Statements Audit 5
Single Audit 7
Financial Highlights 9
Required Communications 14
New Accounting Pronouncements 23
Questions 25
Contact Information 26
/ Table of Contents
2 / Scope of Services
FINANCIAL
STATEMENTS AUDIT
City’s basic financial
statements.
CONSULTING
Year-Round
Consultation on
Financial Account
Matters.
SINGLE AUDIT
City’s Single Audit.
Vasquez & Company LLP meets the independence requirements of the Government Auditing Standards as it relates to the City 3 • There are no relationships between any
of our representatives and the City that
in our professional judgment may
reasonably be thought to bear on
independence.
• Vasquez & Company LLP meets the
independence requirements of the
AICPA and the Government Auditing
Standards as it relates to the City.
/ Independence
4 / Summary of Audit Results
5 Unmodified Opinions on Financial
Statements
The financial statements present fairly, in all
material respects, the City’s financial position and
changes in net position.
The supplemental combining financial statements
and supplemental schedules are fairly stated, in all
material respects, in relation to the basic financial
statements as a whole.
/ Financial Statements Audit
6 Government Audit Standards
• Internal Control over Financial Reporting
– No material weaknesses and significant
deficiencies were noted.
• Compliance and Other Matters
– Our tests disclosed no instances of
noncompliance
/ Financial Statements Audit, Continued
7 Assistance Listing Numbers: Major Programs:
ALN 14.218
ALN 15.507
ALN 20.205
Community Development Block
Grants / Entitlement Grants ($695
thousand)
WaterSMART (Sustain and Manage
America’s Resources for Tomorrow
($740 thousand)
Highway Planning and Construction
(Federal-Aid Highway Program)
($1.7 million)
/ Single Audit
8 Covers 22.79% ($3.18 million) of total Federal
Expenditures of $13.94 million.
CLASSIFICATION The City is classified as a “Low-Risk
Auditee” based on the Federally-
prescribed criteria.
STATUS & RESULTS: Ongoing
/ Single Audit, Continued
9 Fund
Balance
The City’s General Fund (GF) total fund balance
increased by $30.7 million during the year (from $120.1 million in 2024 to $150.8 million at the end of 2025).
The actual budgetary basis fund balance of $147.5
million at the end of the FY is higher than the budgeted amount by $21.2 million. (ACFR p. 39)
Unrestricted GF balance totaling $104.8 million
represents approximately 4.6 months of average GF
expenditures. GFOA recommends, at a minimum, 2
months of average expenditures.
/ Financial Highlights: General Fund
10 Revenue General Fund revenues (excluding transfers in) increased $7.9 million or 2.9% from the prior
fiscal year. Within the General Fund revenues,
there are seven main categories, of which the
City experienced increases in four categories in
fiscal year 2024-25. (ACFR p. 19-20). The
General Fund revenues included sales tax
generated from Measure SST of $25.6 million.
Expenditures Increased by $34.5 million (excluding transfers out), largely due to increase in public safety
expenditures.
/ Financial Highlights: General Fund, Continued
11 / Financial Highlights: General Fund, Continued
General Fund - Fund Balance
2022 2023 2024 2025
Nonspendable 2,094,456$ 2,145,621$ 2,661,453$ 1,822,932$ Restricted 4,637,642 7,024,689 31,039,967 44,224,849 Assigned 5,483,042 5,848,661 7,684,075 81,100,002 Unassigned 44,727,242 63,420,240 78,749,461 23,651,863 Total Fund Balance 56,942,382$ 78,439,211$ 120,134,956$ 150,799,646$ Assigned and Unassigned
Fund Balance (Ratio) to
Monthly GF Expenditures
2.91 3.69 4.30 4.56 Net Pension Liability (asset) (65,132,651)$ 229,369,771$ 250,456,843$ 231,853,852$ Net OPEB Liability 38,813,837 45,657,035 61,680,686 63,925,520 12 / Financial Highlights: Government -wide
Revenues and
Expenditures
Total revenues increased by $49.5 million.
Charges for services and investments earnings
were higher in FY 2025 due to increased
economic activity. (ACFR p. 11)
Expenses increased by $51 million, from $428.1
million in FY 2024 to $479.1 million in FY 2025.
(ACFR p. 11)
Overall Net
Position –
Govt-wide
The City’s overall net position increased by $50
million, from $312 million (restated) to $362
million as of June 30, 2025. (ACFR p. 29)
13 / Financial Highlights: Government -wide, Continued
GASB 101
Implementation
The implementation of GASB 101, Compensated
Absences, resulted in restatement of government-
wide net position with additional liability of $7
million
14 / Required Communications
15 Adoption of, or
Change in,
Accounting
Policies
Management has the ultimate responsibility for
the appropriateness of the accounting policies
used by the City. During the year, the City
adopted GASB Statements 101 and GASB 102.
Significant
Accounting
Policies
We did not identify any significant accounting
policies in controversial or emerging areas for
which there is a lack of authoritative guidance or
consensus.
Significant
Unusual
Transactions
We did not identify any significant unusual
transactions.
/ Required Communications to Those Charged with
Governance
16 Management’s
Judgments and
Accounting
Estimates
Based on our procedures, we determined that
management’s process for formulating
particularly sensitive accounting estimates was
sound, and the estimates were reasonable. Our
work did not reveal any significant issues.
Audit
Adjustments
and
Uncorrected
Misstatement
There were no audit adjustments made to the
original trial balance presented to us to begin our
audit. We are not aware of any uncorrected
misstatements other than misstatements that are
clearly trivial.
/ Required Communications to Those Charged with
Governance, Continued
17 Other
Information
Included in
Annual Reports
Our responsibility for other information included in
annual reports is to read the information and
consider whether its content or the manner of its
presentation is materially inconsistent with the
financial information covered by our auditor’s
report, whether it contains a material
misstatement of fact or whether the other
information is otherwise misleading. We read the
City’s introductory and statistical sections and did
not identify material inconsistencies.
/ Required Communications to Those Charged with
Governance, Continued
18 Disagreements
with
Management
We encountered no disagreements with
management over the application of significant
accounting principles, the basis for
management’s judgments on any significant
matters, the scope of the audit, or significant
disclosures to be included in the financial
statements.
Consultations
With Other
Accountants
We are not aware of any consultations
management had with other accountants about
accounting or auditing matters.
/ Required Communications to Those Charged with
Governance, Continued
19 Significant
Issues
Discussed With
Management
No significant issues arising from the audit were
discussed or were the subject of correspondence
with management.
Significant
Difficulties
Encountered in
Performing the
Audit
We did not encounter any difficult or contentious
matters that required consultation outside the
engagement team and that are, in our
professional judgment, significant and relevant to
your responsibility to oversee the financial
reporting process.
/ Required Communications to Those Charged with
Governance, Continued
20 Significant
Matters That
Required
Consultation
We did not encounter any difficult or contentious
matters that required consultation outside the
engagement team and that are, in our
professional judgment, significant and relevant to
your responsibility to oversee the financial
reporting process.
/ Required Communications to Those Charged with
Governance, Continued
21 Shared
Responsibilities
for
Independence
Independence is a joint responsibility and is
managed most effectively when management,
audit committees (or their equivalents), and audit
firms work together in considering compliance
with American Institute of Certified Public
Accountants (AICPA) and Government
Accountability Office (GAO) independence rules.
For Vasquez and Company LLP (Vasquez) to
fulfill its professional responsibility to maintain
and monitor independence, management, the
City Council, and Vasquez each play an
important role.
/ Required Communications to Those Charged with
Governance, Continued
22 Irregularities,
Fraud or
Illegal Acts
No irregularities, fraud or illegal acts came to
our attention as a result of our audit
procedures.
Management
Representations
The City provided us with a signed copy of the
management representation letters prior to
issuance of our auditor’s opinions.
/ Required Communications to Those Charged with
Governance, Continued
23 / New Accounting
Pronouncements
Effective In Future
Years
24 The Governmental Accounting Standards Board (GASB) has issued several pronouncements prior to June 30, 2025, that have effective dates that may impact future financial presentations.
To be
implemented
in FY 2026
GASB 103 - Financial Reporting Model
Improvements
GASB 104 - Disclosures of Certain Capital
Assets
To be
implemented
in FY 2027
GASB 105 – Subsequent Events
/ New Accounting Pronouncements –
Effective in Future Years
25 / Questions
Vasquez + Company LLP has over 55 years of
experience in performing audit, accounting, and
consulting services for all types of private
companies, nonprofit organizations, and
governmental entities.
Vasquez + Company LLP is proud to be part of
Aprio Alliance—a national association created by
accounting professionals to help collaborative,
growth-minded CPA firms thrive. This affiliation
gives us access to leading expertise, resources, and
best practices, while preserving what matters most:
the personalized service and local insight you
expect from an independent firm. Aprio Alliance
member firms are separate and independent
businesses and legal entities that are responsible for
their own acts and omissions, and each are
separate and independent from Aprio. “Aprio” is the
brand name under which Aprio, LLP and Aprio
Advisory Group, LLC (and its subsidiaries) provide
professional services.
/ Contact Information
26 Cristy Canieda, CPA, CGMA
O: +1.213.873.1720
[email protected]
www.vasquez.cpa
Mary Tanglao
O: +1.213.873.1730
[email protected]
Vasquez + Company LLP has over 55 years of
experience in performing audit, accounting, and
consulting services for all types of private
companies, nonprofit organizations, and
governmental entities.
Vasquez + Company LLP is proud to be part of
Aprio Alliance—a national association created by
accounting professionals to help collaborative,
growth-minded CPA firms thrive. This affiliation
gives us access to leading expertise, resources, and
best practices, while preserving what matters most:
the personalized service and local insight you
expect from an independent firm. Aprio Alliance
member firms are separate and independent
businesses and legal entities that are responsible for
their own acts and omissions, and each are
separate and independent from Aprio. “Aprio” is the
brand name under which Aprio, LLP and Aprio
Advisory Group, LLC (and its subsidiaries) provide
professional services.
27 Thank you for your
time and attention.