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In one of the Measure Q threads Councilmember Donna Neville and I have been having a dialogue about whether the City’s most recent financial audit by their independent auditors was “clean.” The dialogue starts here.
As you can see from the comments in the dialogue, Donna asserts that the audit was “clean,” and I believe the audit was not.
For those of you who prefer not to wade through long threads, here are the reasons I believe what I do. In the interests of transparency, I have sent this to Donna as a personal email as well as posting it here.
Donna, reasonable people can agree to disagree reasonably. I have always found you to be very very reasonable, and this is no different. And I the spirit of that reasonability let me explain why I do not believe the audit is “clean.”
When the 2021 audit arrived in January 2024, the concerns the auditor had raised in the 2020 audit were no longer 4 “Significant Deficiencies,” but rather 5 even more serious “Material Weaknesses” plus 5 “Significant Deficiencies.”
Even more concerning was the fact that the City had made no meaningful progress in addressing 3 of the 4 Significant Deficiencies in the three years between audits. So, with the carry over of those 3 unaddressed Significant Deficiencies there really were 6 Significant Deficiencies in the January 2024 Audit’s Memorandum.
Those factual realities appear to indicate that the Auditor and the City were having conflicts getting the 2021 audit done because (1) the City didn’t appear to be taking the Auditor’s 2020 concerns seriously, and (2) in three years the situation had gotten significantly worse, both in the gravity of the problems and their quantity.
That is what the auditor’s written report tells anyone who reads it, and it is impossible for me to see that as a “clean” audit.
