KINGSBURG – Kingsburg and its Dala horses remain on stable financial footing with mostly positive fund balances and strong accounting practices, according to the city’s most recent audit report.
The Kingsburg City Council received this report on April 16 and voted 4-0 to accept it into the record; Mayor pro tem Vince Palomar was absent. Anthony Gonzales, an audit manager with accounting firm Price Paige & Company, explained the process he and his team went through to analyze the city’s financial statements.
To complete the city’s Annual Comprehensive Financial Report (ACFR) for fiscal year 2023-24 — which ended on June 30, 2024 — Gonzales performed a risk-based audit, he said. This means that auditors reviewed the city’s accounting practices and financial statements to assess the risk of error or fraud.
“I’m pleased to report that we were able to provide the city with a clean opinion, or an unmodified opinion, over the financial statements,” Gonzales said.
With a clean opinion on the audit, this means Price Paige & Company found minimal errors and no evidence of fraud. Gonzales did note, however, that the risk-based audit is designed to provide a “reasonable assurance” that the city’s financials are free from misstatement.
“So not absolute, not 100% assurance that your financial statements are perfect down to the dollar, but within material amounts,” Gonzales said.
In addition to a review of the city’s financial statements, the ACFR also looks at the city’s accounting practices to ensure they are in line with generally accepted accounting principles and additional governmental accounting standards.
Gonzales said the ACFR’s government auditing standards report showed a lot of improvement from the previous year; however, it identified one material weakness in the city’s internal controls related to capital asset transfer and reporting errors. The auditing standards report is not an opinion but rather describes any potential deficiencies in control that the firm notes during its audit.
According to the ACFR, during fiscal year 2023-24, the city identified misstatements made during the prior fiscal year. The misstatements were related to the opening fund balance and net position of governmental activities, business-type activities, various governmental funds and enterprise funds, the ACFR stated.
For example, in the city’s June 30, 2023, net position report of its water fund, it overstated the amount of cash and investments by approximately $20,000. This required the city to adjust and restate the net position of the fund on July 1, 2023.
Along with the presentation from Gonzales, Kingsburg Finance Director Alma Colado highlighted some of the key findings in the ACFR that showed the ending balance and net position of various city funds. Revenues exceeded expenses in the city’s general fund by more than $260,000 and in the disposal fund by approximately $35,000. The disposal fund brought in additional revenue thanks to revised trash rates.
Expenses did exceed revenues in the Measure E fund, which holds revenue generated from the city’s public safety sales tax, by $668,000. Colado said that came from a planned use of the fund’s reserves for a capital improvement project.
The ambulance fund experienced an operating deficit of nearly $1.8 million but is operating in a positive position, according to Colado’s report. The operating deficit was offset by grant funding and transfers from other city funds.
Colado said the water fund also reported an operating deficit of more than $1.1 million. This was attributed to a one-time transfer of funds received from a regional water contamination lawsuit and Sustainable Groundwater Management Act (SGMA) compliance costs.
No members of the public commented on the ACFR, and the Kingsburg City Council had no questions about the audit for Gonzales or Colado.
“I know that this is a very comprehensive report, and thank you very much to Alma and her staff,” Mayor Brandon Pursell Jr. said. “I think this kind of really goes to show that you guys are doing a great job, and we appreciate you very much.”
