Daly City council accepts FY2025 annual comprehensive financial report; auditors report no new findings for second year

Daly City's City Council voted Feb. 9 to accept the fiscal year 2025 Annual Comprehensive Financial Report (ACFAR) after a staff presentation and council questions about audit findings.

Assistant City Manager Tim Nevin told council the independent auditors (Mayes and Associates) issued an unmodified, or "clean," opinion stating the financial statements "present fairly in all material respects the financial position of the city as of 06/30/2025." Nevin said the audit covers all city funds, internal-control reviews and disclosures required for public understanding.

Nevin said auditors have dropped multiple prior-year findings over the last four fiscal years and that for fiscal 2025 there were no new findings; only one older finding remains. He said that remaining finding relates to separation-of-duties controls and will be corrected through the city's new Tyler ERP system, which went live for financials on July 1, 2025 and will deploy its human capital/payroll component in mid-2026.

"By going live with our new financial system, we're going to be able to address that last and final audit finding that the auditors have," Nevin said, adding staff expects auditors to confirm correction after the HCM deployment.

Councilmember DiGiovanni had asked staff to clarify the language around a "significant deficiency" flagged in the audit memos; Nevin explained the auditors issue findings to identify control weaknesses and that staff works to address them, after which the auditors may drop the finding. Councilmembers praised finance staff for the work and engaged in clarifying questions about the nature of the remaining control issue.

Following discussion, councilmember DiGiovanni moved to approve acceptance of the FY2025 ACFAR; Vice Mayor Perano seconded and the motion passed by voice vote.