SANDAG receives first clean audit in years
Improved financial controls helped restore credibility, but auditors warn structural weaknesses, toll system challenges and long-term fiscal risks remain
SAN DIEGO — The San Diego Association of Governments reached a significant milestone as it received an unmodified “clean” audit opinion for the first time in two fiscal cycles.
The audit was conducted by the independent firm Davis Farr LLP and is a step forward for the agency in restoring financial credibility following years of scandals tarnishing SANDAG’s reputation and legitimacy. Jennifer Farr of Davis Farr LLP presented the findings during the June 12 Board of Directors meeting, alongside SANDAG’s Office of the Independent Auditor (OIPA) Courtney Ruby, who outlined an ambitious two-year oversight plan.
Farr told the board the fiscal year 2025 Annual Comprehensive Financial Report showed a “better grading than last year” because auditors were finally able to verify the accuracy of toll road revenues on State Route 125 (South Bay Expressway). The management of the toll road has been under fire for years after it was revealed SANDAG could not reconcile accounts, incorrectly charged about 50,000 customers, and faced significant problems with the back-office system and processing.
Farr said the previous two years were challenging as the agency’s financial statements carried a “qualified” opinion because system limitations made it impossible for external testers to verify the ledger. This year, auditors verified improvements in internal controls and reconciliations, allowing them to conclude that the numbers contained no misstatements.
“We are very pleased to have received the unmodified opinion from the auditors,” SANDAG Director of Accounting and Finance Kimberly Trammel said. “A lot of hard work and effort went into correcting the items identified and documenting that we could support the numbers. And then we also want to acknowledge that there’s still work to do to address the findings, including the one repeat finding that we’ve had. And so we are definitely focused on making those improvements in the areas identified as we head into the next audit cycle.”
While the good news was welcome, Farr and Ruby said the audit revealed persistent structural weaknesses within SANDAG’s accounting department. Farr identified one material weakness and two significant deficiencies related to audit adjustments identified during the review. The finding indicates SANDAG’s year-end closing procedures were insufficient to catch errors before the audit began, requiring auditors to manually correct the books for the second consecutive year.
