SANGER – After receiving and filing another late audit, the city of Sanger is staying steadily on track to catch up on its financial reporting.
On Aug. 6, certified public accountant Ryan Jolley presented the city council with the annual audit for fiscal year 2023-2024. Jolley said the audit resulted in a favorable unqualified opinion with no adjustments, meaning the city made no material misstatements, but noted that some control deficiencies from previous audits have carried over into this one.
Keeping with his assessment of the FY 2022-2023 audit, Jolley said that these deficiencies are showing up as the result of past procedural inadequacies, but expressed confidence in current staff and their ongoing corrective measures.
“The city has made some major strides in rectifying these, but because we’re talking about June 30, 2024, a lot of these are still in place for this fiscal year,” said Jolley to the council. “We intend to see those fall off coming into fiscal year ‘25 and ‘26.”
In his presentation, Jolley highlighted some key numbers from the city’s financial statements for FY 2023-24. According to the report, the city’s ending net position — which Jolley explained is the difference between the city’s total assets less its total liabilities — was more than $88.6 million.
The general fund saw an increase of more than $7 million, which brought the total fund balance a little over $17.1 million at the end of the fiscal year. Jolley said the city’s other major funds operated as intended.
Since the city expended more than $750,000 of federal funds that year, expending just under $4.5 million according to Jolley, the city also had to do a single audit for FY 2023-2024. Through this single audit, Jolley reported material weaknesses regarding: the city’s financial closing at the end of the year, timely reconciliation of cash and investments, grant reconciliation, successor agency reporting and timely submission of a data collection form for the single audit. But he noted again that most of these were repeat findings.
During council comments, Councilmember Michael Montelongo expressed contentment with another audit being completed. However, he also emphasized the importance of staff making true on promises to be on track after the FY 2024-2025 audit.
“I would hope that the majority of these concerns, because now we have stable staff, are going to be gone,” Montelongo said. “If they come back in ‘25, then we as a council need to have a serious talk, because we’ve given significant time … we knew that we were behind, but we shouldn’t be after this.”
Jolley responded by saying that since current Finance Director Virginia Harmon is a recent hire and because the city is still behind on its FY 2024-2025 audit, there will still likely be at least one more year of identified issues. But he again expressed confidence that these will not show up in the future.
“Some of these are probably going to come through for one more year, but (staff) are going to get them cleaned up by the time you get through 2025,” Jolley said to the council.
Responding to a question from Councilmember Esmeralda Hurtado about how the finance department is prioritizing its efforts to catch up on reporting, Harmon shared that her department has been working steadily through bank reconciliations. She said this will help to eliminate at least one of these repeat findings in years to come.
“I can tell you right now the June 30 bank reconciliation is finished, and we’re gonna commence the July reconciliation, so that has been monthly and timely with my staff,” said Harmon. “I have three staff members now that know how to do a bank reconciliation, so that is not an issue going forward.”
With these comments raised and areas of improvement identified, the city council unanimously voted to receive and file the report.
