Tiburon to spend $250k to dig out of audit backlog

Tiburon will spend up to $250,000 on outside accountants to clear a three-year backlog of unfinished financial audits, work that isn’t expected to leave the town current until the middle of 2027 at the earliest.

The Town Council voted 4-0 on Aug. 5 to approve a $195,000 contract with Rogers Anderson Malody & Scott, a San Bernardino accounting firm known as RAMS, to help finish audits for fiscal years 2023-2024, 2024-2025 and 2025-2026. Councilmember Holli Thier, who attended by videoconference, was no longer on the call when the vote was taken.

It is the second agreement the town has signed with the firm. Town Manager Greg Chanis approved an initial $55,000 contract in July under his own signing authority, below the amount that requires council approval. Neither needed a budget amendment, because the current fiscal year 2026-2027 budget already carried money for the work. That money had been going to Regional Government Services, which had provided the town’s finance and accounting help until Tiburon dropped it in July. Chanis said after the meeting that ending that contract cost the town nothing.

The oldest audit, covering fiscal 2024, is scheduled to begin Aug. 17, with financial statements presented to the council by the end of October, Chanis said. The fiscal 2025 audit is projected for January to March 2027, and fiscal 2026, the year that ended June 30, for April to June 2027. The town would be caught up by late July 2027 at the latest.

Much of the delay is a scheduling problem. September through December is the busy season for municipal audits and firms are typically booked solid, Chanis said, adding that the town would keep looking for chances to shorten the turnaround. The town’s auditor, The Pun Group of Santa Ana, works alongside RAMS for several other government agencies, a relationship Chanis credited with securing the Aug. 17 start date quickly. He said The Pun Group has also put Tiburon at the top of its list for any opening.

“If their schedule changes or if one of their current customers drops out, and there’s — a slot opens up, we’d be able to move faster on the subsequent audits,” Chanis said.

The $195,000 buys more than audit help. Under the firm’s proposal, it also covers writing standard operating procedures, reviewing internal-control problems The Pun Group flagged in fiscal years 2021-2022 through 2023-2024, auditing who has access to the town’s financial software and cross-training staff.

Two RAMS employees spent the week of July 6-10 at Town Hall meeting staff, reviewing the town’s systems and calling the auditor to establish where the fiscal 2024 audit stood. From those conversations the firm drew up the timeline and list of priorities Chanis presented.

Chanis also announced that the town will begin giving the council monthly revenue, expense and investment reports at its second meeting of each month, starting Aug. 19, timed so the previous month’s books have closed. The revenue and expense reports will show the prior month’s posted totals, year-to-date figures and variances from the approved budget. The investment report will cover balances in the town’s cash accounts and in its two trust accounts for pension obligations and other post-employment benefits, such as retiree healthcare.

A 10-year comparison of actual revenue and expenses against the budgets adopted for those years is also targeted for Aug. 19. All the reports will be posted to the town’s website after each meeting.

Residents have pressed the council for months over financial transparency. Evan Segal, who has written repeated letters to the editor calling for an independent financial oversight committee like Belvedere’s, wrote the council July 8 asking for year-to-date financials, a precise timeline for the outstanding audits and whether the budget and finance committee had met at all this fiscal year. He also asked whether the council had sought a briefing from the town attorney on its fiduciary obligations in adopting a budget without current audits.

Chuck Hornbrook, a parks commissioner running for Town Council in November, lists creating an independent finance committee among his top priorities and argued in a July 29 letter to the editor that Tiburon should copy Belvedere, where resident volunteers appointed by the City Council review draft budgets and annual audits.

Colin Crawford, Hornbrook’s campaign treasurer and a former audit manager and chartered accountant, told the council the progress on audits was partly a result of public comment.

“It’s good to see some progress being made,” Crawford said, but he said Tiburon remains “two years in arrears” and that he worried the fiscal 2024 audit would not be finished before voters go to the polls in November.

“Timely audits are the foundation of public trust in the town’s financial management,” he said.

Crawford asked the council to adopt a permanent policy requiring audits within 60 to 90 days of the close of a fiscal year, a standard he said well-managed cities meet and Tiburon is “nowhere near.” He also asked the council to restate the budget it adopted in June with actual figures rather than the projections it carries now.

Councilmember Jack Ryan told Chanis “the path that you’ve laid out is excellent,” then floated one shortcut: having someone verify that the money the town says is in its bank accounts is actually there.

“Colin Crawford’s going to be pissed at me, but that’s 80% of what a good audit will do, is just to make sure you have the cash that you say,” Ryan said. Mayor Jon Welner said staff could bring it to the council’s Aug. 19 meeting.

Vice Mayor Isaac Nikfar backed the idea and repeated a point he made during June budget talks: The town’s revenue has grown substantially over the past decade, and so have its costs.

“I think it’s really important for us … especially as the dollars get bigger and bigger and bigger, for us to understand what is coming in and going out on a very, very regular basis,” Nikfar said.

No councilmember took up Crawford’s call for a standalone oversight committee that would include qualified members of the public, though Ryan asked for one in June. At the June 17 budget hearing, he requested a future agenda item to weigh creating an independent board of appointed residents, with perhaps one councilmember on it, saying such a body could take on analysis the council now does itself and would bring expertise it lacks. Welner responded by proposing that the town’s existing two-member Budget and Finance Committee, the mayor and vice mayor, meet over the July recess as a first step.

Welner said at the start of the item that the committee, now himself and Nikfar, met once between the June 17 budget adoption and the Aug. 5 meeting and would meet again. They discussed the audits and “other issues that were raised previously at that (council) meeting,” he said. Crawford said the subcommittee did not appear to have met before this year’s budget was presented.

Nikfar said after the meeting he had no opinion on Crawford’s request. Welner declined to answer questions afterward about an independent finance committee and asked that they be emailed to him. He then declined to comment via email.

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