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WATER ENERGY LIFE CITY OF RjVEIZSIDE lag PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: JANUARY 8, 2024 SUBJECT: RIVERSIDE PUBLIC UTILITIES 2023 ANNUAL AUDIT AND FINANCIAL REPORT ISSUE: Consider recommending that the City Council approve the Riverside Public Utilities 2023 Annual Audit and Financial Report for the fiscal year ended June 30, 2023. RECOMMENDATION: That the Board of Public Utilities consider the Riverside Public Utilities 2023 Financial Report and recommend City Council approval. BACKGROUND: An independent audit is performed each year of the City of Riverside and its related entities' financial statements. On June 4, 2019, the City Council approved a five-year term with Lance, Soll & Lunghard to serve as independent external auditors for annual financial statements. Riverside Public Utilities (RPU) fiscal policy was adopted by the Board of Public Utilities (Board) on May 23, 2016, and City Council on July 26, 2016. The cash reserve section of the fiscal policy was updated and approved by the Board on July 26, 2021, and City Council on September 7, 2021. Per the fiscal policy, RPU shall prepare annual full -accrual financial statements, including the Management's Discussion and Analysis and the accompanying Notes to the Financial Statements. Per the City's Charter Section 1202(a), the Board of Public Utilities "shall have the duty" to consider the annual budget of the Department of Public Utilities and make recommendations to the City Council and the City Manager. DISCUSSION: The City's independent auditor, Lance, Soll & Lunghard, LLP has completed the Fiscal Year 2022- 23 annual audit of RPU's financial statements. The auditors provided an unmodified, or clean, opinion that RPU's financial statements are presented fairly and in conformity with generally accepted accounting principles. This clean audit opinion reflects that RPU observed compliance with generally accepted accounting principles and statutory requirements. RPU had no audit findings or instances of material weaknesses or significant deficiencies identified during the audit process.