City Council Agenda Report
Meeting Date: January 20, 2026
From: Alice Hui, Director of Finance/City Treasurer
Department: Finance
Submitted by: Angela Melgar, Finance Manager
Subject
Fiscal Year 2024-25 Audited Financial Reports
Recommendation
A. Receive and file the Fiscal Year 2024-25 Annual Financial Statements; and B. Extend submission of the Fiscal Year 2025-26 Annual Financial Statements and Report to the City Council to January 19, 2027.
Background
City Charter Article 8.11 requires City Council to appoint a California certified public accounting firm to provide an independent, annual audit of all City accounts, including the accounts of all departments, officers and employees who receive, handle or disburse public funds. Audits are to be performed in accordance with the generally accepted auditing standards (GAAS) set forth for financial audits by the American Institute of Certified Public Accountants (AICPA) Auditing Standards Board (ASB) and the U.S. Government Accountability Office’s (GAO) Government Auditing Standards. Additionally, the Charter requires the final audit to be submitted to Council 120 days after the end of the fiscal year but allows Council to extend the deadline. Accordingly, on January 21,2025 the City Council extended the deadline for the Fiscal Year (FY) 2024-25 Final Audit and Report to Council to January 20, 2026.
The FY 2024-25 financial audit was conducted by the City’s independent auditors, The Pun Group LLP, Certified Public Accountants and Business Advisors. The Finance Department is pleased to report that the City received an unmodified opinion, commonly known as a “clean opinion”, indicating that no material deficiencies were identified in the City’s internal controls, financial condition, or operations. Throughout the audit process, City staff worked closely with the auditors and provided full access to all requested financial records, including the City’s financial software, to support the audit and the issuance of the clean opinion. The independent auditors’ unmodified opinion provides assurance that the City’s financial statements fairly present, in all material respects, the financial position of the City, changes in financial position, and cash flows for the fiscal year ended June 30, 2025. A representative from The Pun Group LLP will provide a presentation on the results of the FY 2024-25 audit.
The FY 2024-25 represents the first year the Finance Department prepared an Annual Comprehensive Financial Report (ACFR), which includes the City's audited financial statements and required statistical information that comply with the Government Finance Officer Association's (GFOA) award guidelines. The GFOA established the Certificate of Achievement for Excellence in Financial Reporting Program to recognize state and local governments that go beyond the minimum requirements of generally accepted accounting principles and demonstrate transparency and full disclosure in the annual comprehensive financial reports. The ACFR was prepared in accordance with the Generally Accepted Accounting Principles (GAAP) along with the reporting requirements of the Governmental Accounting Standards Board (GASB). The report has been submitted to the GFOA Certificates of Achievement for Excellence in Financial Reporting Program, the highest recognition awarded in governmental accounting and financial reporting.
As noted above, Charter Article 8.11 requires that the final audit be submitted to Council within 120 days after the end of the fiscal year. With the City’s fiscal year ending on June 30, FY 2025- 26 audited financial statements would need to be submitted to Council by late October 2026. However, 120 days after the end of the fiscal year (June 30) is not feasible as it can take several months to receive all documents from outside contractors and vendors to accrue all expenditures related to the prior year, finalize journal entries, reconciliations and for the auditors to complete their audit and produce the final audited financial reports. Moreover, industry best practice is 18 months after a budget is adopted, which places finalization of the audited financial reports by end of the calendar year and presentation to Council soon after. Pursuant to Charter Article 8.11, the City Council may extend the deadline for submission of audited financial statements beyond 120 days after the end of the fiscal year. Accordingly, staff requests an extension for submission of the final audit and report to Council for FY 2025-26 Annual Financial Statements to January 19, 2027.
Fiscal Impact
There is no fiscal impact associated with this report.
Attachments
1. Annual Comprehensive Financial Report for FY Ended June 30, 2025
2. Audited VPU Financial Statements for FY Ended June 30, 2025
3. Auditor Presentation