CSD Receives a Relatively Good Audit Report for 20/21 Fiscal Year
Mar 06, 2024 10:40AM ● By Gail Bullen, River Valley Times Reporter, photo by Gail Bullen
RANCHO MURIETA, CA (MPG) - The just-completed audit report for the 20/21 fiscal year finally became a topic when the Rancho Murieta Community Services District Financial Committee met on Feb. 29.
General Manager Mimi Morris described it as a “fine audit” despite being a qualified report. “There is a lot of forward motion that can happen now that the audit is done,” she said.
The district had been working on the audit since the summer of 2022, which is an unusually long time, Morris said. However, later in the meeting, she described the 20/21 fiscal year “as a big of a dumpster fire.” The auditors also sent the district a punch list of 79 financial record problems that had to be fixed before they could complete an audit.
The Finance Committee is comprised of Directors Martin Pohll and Stephen Booth, Morris, Director of Finance and Administration Mark Matulich, and other staff. They review financial issues in depth and make recommendations to the entire board.
Morris asked Matulich to go into detail about the audit report, which had been sent to the district by Richardson & Co. several days earlier.
Matulich said the district is like five businesses, which adds complexity to the accounting. He said the auditors gave an unmodified opinion, which is a clean audit, on the drainage, solid waste, and security fund. However, the district received a qualified opinion on the water and sewer funds.
“What that means is that except for a specific matter than the auditors discuss here in their report, the financial statements are presented fairly in all material respects,” he said.
The qualification has to do with the district’s lack of methodology for valuing and recording easements and developer-donated infrastructure as capital assets. Matulich said the district has developed a procedure to account for new infrastructure moving forward. The challenge will be going backward to account for past donations that were never booked, a task the auditors are assuming will take a long time.
Matulich also discussed and answered questions about the district’s financial statements that were incorporated into the report. Among the points of interest were that the district’s net position, increased by $5.1 million over the previous year, but the operating budget still ended up $1.2 million in the red. The reserves also stood at $7.9 million.
Pohll asked if the board would have to wait for 21/22 and 21/23 to be completed before having confidence in the reserve balances. Matulich told him that based on the solid numbers as of June 30, 2021, staff will be able to make “good estimates” so the board has the information it needs to make spending decisions.
“Well, an estimate is better than we have right now,” Pohll said.
Pohll also asked about the schedule for the remaining audits. Morris said it might take nine months to finish 21/22 and 22/23 and that 23/24 probably would be finished by December.
The 20/21 audit report can be viewed on the district’s website inside the packet for the Feb. 29 Finance Committee meeting.
