Sausalito’s Finances: Facts, Audits, and Focus

Aug 13

Dear Positive People,

You may have seen recent calls for a forensic audit of the City’s finances. While these demands are coming from a small group of residents, they’ve created confusion in the community and are not based on the facts. So let’s take a moment to clarify what’s actually happening based on our most recent independent financial audit and the adopted FY2025–26 budget.

📊 What’s the Difference Between a Financial Audit and a Forensic Audit?

Annual Financial Audit:
Conducted every year by an independent CPA firm. It reviews the City's financial statements, internal controls, and compliance with government accounting standards.

In FY2023–24, Sausalito received a clean audit with no findings.
This means our financial reporting was found to be accurate, transparent, and fully compliant.

Forensic Audit:
A forensic audit is a specialized investigation typically launched when there is strong suspicion of fraud, theft, or criminal wrongdoing.

It is far more costly and invasive, and only appropriate when there’s clear evidence of misconduct.
In Sausalito’s case, there is no such evidence.

💼 Sausalito’s Finances Are on Solid Ground

Our most recent audit from an independent, third-party firm confirmed our financials are in full compliance with Generally Accepted Accounting Principles (GAAP).
The FY2025–26 budget includes over $11 million in capital improvements, fully funded reserves for pension and insurance obligations, and a balanced General Fund without using emergency reserves.
An audit of FY2024–25 is already underway, with results expected in January as part of our normal process.

🛠 Let's Stay Focused on What Matters

Calls for a forensic audit may be loud, but they’re not based on evidence. Launching a costly investigation with no basis would divert staff time, taxpayer money, and our attention away from the real work that’s moving Sausalito forward.

We should be focused on rebuilding our infrastructure, supporting our local economy, improving our downtown, managing long-term obligations, and delivering reliable services to residents, not chasing shadows.

Those calling for a forensic audit often frame it as a matter of “restoring trust.” But the reality is: they don’t trust the process, the auditors, or the results and likely never will. Even a forensic audit, if it came back clean, that would not change. This isn’t about uncovering facts, it’s about fueling mistrust.

Thank you for being engaged and informed. Our community works best when we lead with facts and stay focused on the future.

Let’s Talk About the Forensic Audit Calls—And the Facts Behind Them

Over the past few weeks, a small group of residents has called for a forensic audit of Sausalito’s finances. Their concerns have circulated through social media, emails, and a petition. While public scrutiny is healthy and welcomed, it’s important to clarify what’s being alleged and what the facts actually show.

Below is a summary of the main claims being made, and a clear explanation of how they hold up against audited financials and adopted public budgets.

❓Claim #1: The former Finance Director was fired abruptly—something must be wrong.

➡ Fact: The City does not publicly comment on personnel decisions, which is standard practice to protect employee privacy. That being said, there is no indication that any financial mismanagement occurred during or after the transition. In fact, the FY2023–24 audit was the cleanest in over a decade—with no findings or material concerns.

❓Claim #2: The Interim Finance Director isn’t a CPA.

➡ Fact: Jesus Nava, the Interim Finance Director, holds a Master’s degree in Public Administration and brings decades of senior public finance and city management experience, including in cities like San Jose, Burlingame, and Oxnard. A CPA license is not a requirement for the role. Nava’s real-world expertise and leadership have already helped stabilize and improve the City’s financial practices during this transitional period.

❓Claim #3: The City excluded $1.8 million in known repair needs from the budget.

➡ Fact: The $1.8 million referenced comes from a facilities assessment report. Many of those repairs are being funded through the new Capital Improvements Plan, which includes over $11 million in investments for FY2025–26. Other lower-priority items are being phased in over time, which is standard in municipal budgeting.

❓Claim #4: The City is misusing “Enterprise Funds” as slush funds.

➡ Fact: Transfers from enterprise funds (like the MLK and Parking Funds) to the General Fund are legal, transparent, and publicly approved during the budget process. Each year, the City Council must decide how much to allocate to infrastructure investment, how much to use to fund the city, and how much to save. Capital projects at MLK and city parking lots are funded in this year’s budget, directly addressing the facilities these critics claim are being neglected.

A forensic audit wouldn’t reveal anything new. What we need, and what we’re doing, is making smart, public, and legal decisions to fund the services and facilities our community depends on.

❓Claim #5: Professional services spending ($3.6M) is bloated and unexplained.

➡ Fact: That amount includes legal counsel, engineering and planning consultants, financial advisers, and other specialists. Much of it supports complex infrastructure projects and lease agreements. These contracts are reviewed and approved by the City Council in public meetings, and the City has already begun reducing reliance on outside services by hiring permanent staff.

❓Claim #6: Insurance costs are out of control and hidden.

➡ Fact: The City was dropped by its previous insurer due to high claims under a low-deductible policy. We now have a higher-deductible policy, which means we pay more per claim, but we’ve fully funded reserves to cover this. The budget includes all insurance obligations, and the City is implementing measures to reduce future risk and costs.

❓Claim #7: We need a forensic audit to find out what’s really going on.

➡ Fact: A forensic audit is a tool used to investigate suspected fraud or criminal behavior. It is not a routine financial review; it’s invasive, costly, and only appropriate when there is clear evidence of wrongdoing.

Sausalito just completed a clean financial audit by an independent CPA firm, which confirmed our finances are in order. Another regular audit is already underway for FY2024–25 and will be completed in early 2026.

🧭 Where We Are and Where We’re Going

The facts show that Sausalito is on solid financial footing:

We’ve received the strongest audit result in over a decade
We have $10 million in reserves available for emergencies or strategic investment
We’re funding major infrastructure improvements across the city
We’re managing long-term liabilities like pensions and insurance head-on

City staff, the Council, and the community have worked hard to bring stability, transparency, and long-term planning back to City Hall.

Those calling for a forensic audit often frame it as a matter of “restoring trust.” But the reality is: they don’t trust the process, the auditors, or the results and likely never will. Even a forensic audit, if it came back clean, wouldn’t change that. This isn’t about uncovering facts, it’s about fueling mistrust.

Meanwhile, a forensic audit without any credible cause would waste public resources, distract staff, and stall the progress we’re making on priorities that matter: fixing our streets, improving our downtown, supporting our local economy, and delivering services that residents rely on every day.

Let’s stay focused on what counts and make decisions grounded in facts, not fear.

Adrian Brinton