PREPARED BY: Arturo Castillo DATE OF MEETING: 01/20/2026
SUBJECT:
TITLE
RECEIVE AND FILE THE ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2025
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Receive and File
Body
Compliance statements
Continue Fiscal Resilience, Fiscal Excellence and Fiscal Transparency is an adopted City Council Priority contained in the adopted Fiscal Year 2025-2027 City Council Priority Workplan, effective April 7, 2025.
BACKGROUND
State law requires all general-purpose local governments to publish a complete set of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) within six months of the close of each fiscal year. In compliance with this requirement, the City underwent an independent audit of its financial statements by the City’s external auditor, Maze & Associates, for the fiscal year ended June 30, 2025.
The audit and the statements were conducted in conformity with GAAP as well as standards set forth by the Governmental Accounting Standards Board (GASB). The City’s Annual Comprehensive Financial Report (ACFR) for fiscal year 2025 is included as an attachment and is also available for City Council and public review on the City’s website.
A paper copy will also be available at the City Manager’s Office by month end.
Certificate of Achievement for Excellence in Financial Reporting
The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of San Pablo for its ACFR for the past twenty-seven years. To be awarded a Certificate of Achievement, a government entity must publish an easily readable and efficiently organized Annual Comprehensive Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City staff believes that the current ACFR continues to meet the Certificate of Achievement Program requirements and will submit the document to GFOA to determine eligibility for another certificate.
Review of the Annual Comprehensive Financial Report
The ACFR is comprised of three parts. Part 1 is the Introductory Section to the Report and contains the Letter of Transmittal. This Letter introduces the reader to programs and activities of each department of the City as well as major initiatives of the City Council, including capital construction projects during the fiscal year.
The Financial Section comprises Part 2 of the Report and includes the Auditor’s Opinion (see below) and the Management’s Discussion and Analysis (MD&A). The MD&A offers highlights and a narrative from a staff perspective of the City’s financial condition based on the financial statements. The many numeric tables and schedules show the financial condition of each of the City’s funds during Fiscal Year 2024-25, and how the City’s financial picture has changed over the past fiscal year. The Notes to the Financial Statements are also included in this section. These Notes provide detail and history to the reason for the financial condition articulated in the Financial Statements and help the reader understand what the numbers represent.
Part 3 is the Statistical Section. This section provides context to help the reader understand the current financial condition by comparing it to the last ten years of historical information using charts and graphs. For instance, financial trends, revenue capacity, debt capacity and demographic information of the City will help the reader understand where San Pablo has been financially for the last ten years and to provide important insight into the City’s future financial direction and trends.
Auditor’s Opinion
The Auditor’s Opinion is, perhaps, the most important aspect of the audit. The audit opinion accompanies the financial statements to certify that the procedures and records used to produce the statements are in good working order and that in the auditor’s independent opinion, the financial statements present an accurate picture of the City’s financial condition. However, responsibility for both the accuracy of the data and the completeness and fairness of all information including all disclosures is the responsibility of the City.
The Auditor has given an “unmodified” opinion as follows: “In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City as of June 30, 2025, and the respective changes in financial position and the respective budgetary comparisons listed in the Table of Contents as part of the basic financial statements for the year then ended in accordance with accounting principles generally accepted in the United States of America.”
Memorandum of Internal Control (MOIC) and Required Communications
The MOIC is provided as an Attachment in this Report. This communication is intended solely for the information and use by management, City Council, others within the organization, and agencies and pass-through entities requiring compliance with Government Auditing Standards and is not intended to be and should not be used by anyone other than these specified parties.
The City’s internal control over financial reporting (internal control) is considered as a basis for the design of the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on the financial statements. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented or detected and corrected on a timely basis.
Included in this Report are recommendations considered to be opportunities for strengthening internal controls and operating efficiency. City management carefully reviewed the report and agrees with the auditor’s comments and recommendations. In response to this report, management has put together corrective actions to be implemented immediately to address such matters.
Budget, Fiscal & Legislative Standing Committee (BFLSC) Review
The scheduled meeting for the Budget, Fiscal & Legislative Standing Committee (BFLSC) on January 14, 2026 was scheduled to review the summary findings of the ACFR and findings noted in the MOIC, with City Manager, City staff and the City’s Auditor, Maze and Associates.
FISCAL IMPACT
While this Report describes the financial condition of the City for FY 2024/25, this item is for informational purposes only and has no direct fiscal impact.
ATTACHMENT
Att. A - Annual Comprehensive Financial Report (ACFR) FY 25
Att. B - Memorandum of Internal Control (MOIC) FY 25
Att. C - Required Communications FY 25
Att. D - GANN Limit Agreed Upon Procedures FY 25