Audits

Every year an independent certified public accounting (CPA) firm audits the District’s financial statements. The auditor gives an opinion on whether the statements fairly present the District’s finances, and separately reports on the District’s internal controls and on compliance with laws, regulations and agreements. Each audit is presented to the Board of Directors at a public meeting, where the auditor answers questions and the Board votes to accept it.

Audit reports

Each entry shows the fiscal year (July 1 to June 30), the firm that did the audit, the date of the auditor’s report, when the Board accepted it, and what the auditor reported about internal controls.

FY 2024-25: Annual Financial Report (PDF). Auditor: R.T. Dennis Accountancy. Report dated September 17, 2026. Board accepted a draft May 26, 2026 and the final report September 22, 2026. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2023-24: Annual Financial Report (PDF). Auditor: R.T. Dennis Accountancy. Report dated June 4, 2025. Presented June 24, 2025; accepted August 26, 2025. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2022-23: Annual Financial Report (PDF). Auditor: R.T. Dennis Accountancy. Report dated July 10, 2024. Accepted July 23, 2024. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2021-22: Annual Financial Report (PDF). Auditor: R.T. Dennis Accountancy. Report dated June 9, 2023. Accepted June 27, 2023. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2020-21: Annual Financial Report (PDF). Auditor: R.T. Dennis Accountancy. Report dated July 21, 2022. Accepted July 26, 2022. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2019-20: Annual Financial Report (PDF). Auditor: R.T. Dennis Accountancy. Report dated July 8, 2021. Accepted September 21, 2021. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2018-19: Annual Financial Report (PDF, scanned; two pages are dark in the scan). Auditor: R.T. Dennis Accountancy. Report dated June 23, 2020. Accepted August 18, 2020. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2017-18: Annual Financial Report (PDF). Auditor: Dennis Cooper & Associates, CPAs. Report dated July 25, 2019. Board acceptance date not found in the posted minutes. Result: the auditor reported no material weaknesses in internal control and no reportable noncompliance.
FY 2016-17: Audit Report (PDF, scanned). Auditor: Pehling & Pehling, CPAs. Report dated November 8, 2017. Board acceptance date not found in the posted minutes. Result: two material weaknesses — lack of segregation of duties, and reliance on the auditor to prepare the financial statements.
FY 2015-16: Audit Report (PDF). Auditor: SingletonAuman PC. Report dated November 16, 2016. Board acceptance date not found in the posted minutes. Result: three internal control findings — segregation of duties, financial reporting, and cash disbursements — with the District’s corrective action plan.
FY 2014-15: Audit Report (PDF). Auditor: SingletonAuman PC. Report dated October 23, 2015. Board acceptance date not found in the posted minutes. Result: three internal control findings — segregation of duties, financial reporting, and cash disbursements — with the District’s corrective action plan.

A “material weakness” is a gap in internal control serious enough that a significant error in the financial statements might not be caught in time. Findings like segregation of duties are common in very small offices, where only a few people handle money and records.

Who audits the District

FY 2025-26 forward: Nigro & Nigro, PC, Certified Public Accountants. The Board awarded the auditing services contract to the firm on August 25, 2026 (5-0 vote), and it began the FY 2025-26 audit in September 2026.
FY 2018-19 through FY 2024-25: R.T. Dennis Accountancy (Rancho Cucamonga)
FY 2017-18: Dennis Cooper & Associates, CPAs (Rancho Cucamonga)
FY 2016-17: Pehling & Pehling, CPAs
FY 2014-15 and FY 2015-16: SingletonAuman PC (Susanville)

Management letter

A management letter is a separate letter from the auditor to the Board that points out weaknesses or concerns the auditor noticed during the audit and recommends improvements. It goes beyond the formal findings in the audit report. The District has not received a management letter with its past audits.

Beginning with the FY 2025-26 audit, the District’s new auditor, Nigro & Nigro, PC, will provide a management letter. It will be posted on this page with the audit. Until then, the closest information is the auditor’s report on internal control included in each audit above, and the findings and corrective action plans in the FY 2014-15, FY 2015-16 and FY 2016-17 audits.

How the District keeps its books: GAAP

GAAP stands for generally accepted accounting principles. These are the common rules for how financial statements are prepared, so that a reader can compare one agency’s finances with another’s and trust that the numbers were put together the same way each year.

For state and local governments in the United States, GAAP is set by the Governmental Accounting Standards Board (GASB), an independent standard-setting board. GASB issues numbered “Statements.” A CPA cannot say a government’s financial statements are fairly presented under GAAP if they do not follow GASB’s standards.

Why it matters for the District:

Water and sewer are run as “enterprise funds,” like a business. They use full accrual accounting: revenue is recorded when it is earned and costs when they are incurred, not just when cash moves. This shows the true cost of service, including wear on pipes, tanks and the treatment plant (depreciation).
GAAP requires the District to report long-term obligations such as its share of CalPERS pension costs, so ratepayers and lenders can see the full picture, not just this year’s bills.
State reports and lenders rely on these statements. The State Controller’s annual report asks for data from audited GAAP statements, and the State Water Board reviews a district’s financial statements when it makes loans and grants.

GASB standards that shape the District’s reports include:

GASB 34: the basic financial reporting model — management’s discussion and analysis, statement of net position, statement of revenues, expenses and changes in net position, statement of cash flows, and notes.
GASB 68: pensions. The District reports its share of the CalPERS net pension liability using reports CalPERS prepares each year.
GASB 75: retiree health and other post-employment benefits (OPEB).
GASB 87 and 96: leases and software subscriptions.
GASB 101: compensated absences (accrued vacation and leave), first required for FY 2024-25.
GASB 103: updates to the reporting model, first required for FY 2025-26.

What is in each audit report: the independent auditor’s report and opinion; management’s discussion and analysis (when included); the financial statements and notes; required supplementary information such as the pension schedules; and the auditor’s report on internal control and compliance, prepared under the U.S. Government Accountability Office’s Government Auditing Standards (the “Yellow Book”).

Financial reports the District is required to prepare

The District prepares or files the reports below. Each entry explains what it is, who receives it, when it is due, how it is done, why it is required, and where to find it.

1. Annual independent audit

What: an audit of the District’s financial statements by an independent CPA firm.
Required by: California Government Code section 26909 and the State Controller’s Minimum Audit Requirements and Reporting Guidelines for California Special Districts (California Code of Regulations, Title 2, section 1131 and following).
Who receives it: the State Controller, the Plumas County Auditor, and the Plumas Local Agency Formation Commission (LAFCo).
Due: within 12 months after the end of the fiscal year (by June 30 of the following year).
How: the District contracts with a CPA firm. The firm tests the District’s records and issues its report, which is presented to the Board and then filed.
Why: an independent check that the District’s financial statements are accurate and that public money is properly controlled.
Where to find it: on this page.

2. Single Audit (federal funds)

What: an additional audit of federal grant and loan programs, required in any year the District spends federal awards at or above the federal threshold.
Required by: Title 2, Code of Federal Regulations, section 200.501. The threshold is $1,000,000 in federal awards spent in a fiscal year beginning on or after October 1, 2024 (FY 2025-26 for the District); it was $750,000 before that.
Who receives it: the Federal Audit Clearinghouse, and the agency that passed the federal funds to the District.
Due: the earlier of 30 days after the auditor’s report or nine months after fiscal year end (March 31 for the District).
How: done by the District’s auditor as part of the annual audit. Some State Water Board Clean Water State Revolving Fund (CWSRF) money is federal; each financing agreement identifies the federal portion, and the auditor determines each year whether a Single Audit is required.
Why: to show that federal money was spent according to the program rules.
Where to find it: Federal Audit Clearinghouse, and on this page in any year one is required.

3. Financial Transactions Report (FTR) to the State Controller

What: a standardized annual report of the District’s revenues, expenses, assets and debt.
Required by: Government Code section 53891.
Who receives it: the California State Controller.
Due: within seven months after fiscal year end (about January 31), or a later date set by the Controller.
How: filed electronically through the Controller’s Local Government Reporting System (LGRS Online), using figures from the audited financial statements.
Why: lets the State and the public compare the finances of every local agency in California, and is the basis of the Controller’s published reports.
Where to find it: State Controller’s By the Numbers (search for Chester Public Utility District).

4. Government Compensation in California report

What: the pay and benefits of each Board member and employee for the prior calendar year.
Required by: Government Code sections 53891 and 53892. Under section 53908, the District also posts this information, or a link to it, on its website.
Who receives it: the California State Controller.
Due: April 30 each year, for the prior calendar year.
How: submitted to the Controller using the Controller’s reporting template.
Why: public transparency about what public agencies pay their officials and staff.
Where to find it: Government Compensation in California (search for Chester Public Utility District).

5. Annual budget

What: the District’s spending plan for the fiscal year, adopted by the Board at a public meeting.
Required by: District Policy 3020 (Budget Preparation and Administration). Government Code section 53901 requires a copy to be filed with the county auditor.
Who receives it: the Board adopts it; a copy is filed with the Plumas County Auditor.
Due: filed within 60 days after the fiscal year begins (by about August 29).
How: staff prepare a preliminary budget, the Board holds a public hearing and adopts it, and amendments are approved by the Board during the year.
Why: sets spending limits and shows ratepayers how their money will be used.
Where to find it: the District’s Budget page.

6. Monthly financial reports to the Board

What: the monthly Statement of Net Position and Statement of Activities, presented on the Board’s regular meeting agenda.
Who receives it: the Board of Directors, at public meetings.
Why: lets the Board track revenue and spending during the year rather than waiting for the audit.
Where to find it: Board agendas and minutes on CivAssist.

7. CalPERS pension reports (GASB 68)

What: reports CalPERS prepares each year showing the District’s share of pension liabilities and costs.
Who prepares them: CalPERS, for all participating public agencies.
How they are used: the District’s auditor uses them to record pension amounts in the financial statements.
Where to find them: CalPERS GASB reports.

8. State Water Board financing agreements

What: the District’s Clean Water State Revolving Fund grant and loan agreements require the District to keep project records according to GAAP, allow audits by the State Water Board and federal agencies, and comply with Single Audit rules when they apply.
Why: to show that state and federal funds were spent on the approved project.
Where to find more: State Water Board CWSRF program.

Questions

This page is a plain-language summary for public information; the laws and agreements cited control. For copies of other financial records, use Public Records Requests, or contact the District office at (530) 258-2171.