Presentation to the City Council
For the Fiscal Year Ended June 30, 2025
January 20, 2026
City of Vernon
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Contents
• Scope of Work
• Required Communications (AU-C 260)
• Financial Audit Results
3 Scope Of Work
4 Scope of Work
Compliance Audit Single Audit
State Controller’s Report
Other AU-C 260 Communication with Those Charged with Governance Preparation of Annual Comprehensive Financial Report (ACFR) Financial Statement Audits Audit of the City’s Annual Comprehensive Financial Report (ACFR) Vernon Public Utilities Financial Report
5 Required Communications (AU-C 260)
6 Management Responsibilities
• Preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, • 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.
• In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about City of Vernon’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 7 Our Responsibilities
• Express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles.
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. • Consider internal control over financial reporting. Such considerations are solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern. 8 Other Required Communications
• Ethics and Independence
• Complied with ALL relevant ethical requirements regarding independence • Significant Accounting Policies
• The City disclosed all significant accounting policies in Note 1 to the financial statements. • Significant Estimates
• Investment fair value
• Depreciation and amortization on capital assets
• Net pension liability
• Net other postemployment benefits (“OPEB”) liability
9 Other Required Communications
• Sensitive Disclosures
• Note 1 – Summary of Significant Accounting Policies
• Note 8 – Pension Plan
• Note 9 – Other Postemployment Benefits (“OPEB”)
• Note 13 – Commitments and Contingencies
• Misstatements
• There were no material uncorrected misstatements.
10 Other Required Communications
• Consultation with Other Accountants
• Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and other matters. • Significant Difficulties
• We encountered no significant difficulties in dealing with management. • Disagreement with Management
• We did not have any disagreement with management in terms of accounting treatments nor audit procedures performed.
11 Financial Audit Results
12 Audit Results
• Unmodified Opinion
• Financial Statements are fairly presented in all material respects • Significant accounting policies have been consistently applied • Estimates are reasonable
• Disclosures are properly reflected in the financial statements • Other Results
• No disagreements with management
• No material weaknesses in internal controls over financial reporting were reported • No accounting issues
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