Board accepts auditors' report with unmodified opinion; commends finance team

The San Francisco Health Service System board on Nov. 18 accepted the independent auditors' report on the employee benefits trust for the year ended June 30, 2021, after auditors reported an unmodified opinion and found no reportable internal-control deficiencies.

Craig Harmer, a director with audit firm MGO, told the board the remote audit was completed ahead of schedule and that his team issued an "unmodified opinion on the financial statements," the highest level of assurance an independent auditor gives. Harmer also said the audit identified no compliance issues that would materially affect the financial statements and no subsequent events requiring disclosure through the report date of Oct. 13, 2021.

Larry Liu, chief financial officer for SFHSS, highlighted key early-year figures the report covers: a roughly $460,000 surplus in the general administrative budget through Sept. 30, 2021, a projected slight net reduction of about $84,000 for that budget year-to-date projections, and a forecasted modest decrease of about $2.2 million in the employee benefits trust, leaving a projected fund balance of about $123.7 million. Harmer noted that managementused actuarial estimates for claims reserves and confirmed the auditors' contractor produced similar results, supporting the reasonableness of those estimates.

Commissioners thanked the finance staff and auditors for the thorough work; one commissioner requested clearer narrative language in the published materials to state explicitly that the auditors found no significant discrepancies or material weaknesses. The board moved to accept the audit report with a special commendation to the finance team; the motion passed unanimously.