03:06The financial audit presentation, led by Ryan Schmidt, highlighted a notable increase in the city’s expenditures, which exceeded the budget by approximately $2.3 million. This excess was largely attributed to a land purchase financed via bond proceeds. The audit revealed that while revenues surpassed expectations by $134,000, the city’s expenditures impacted the fund balance, which decreased by $216,000 compared to a budgeted decrease of $37,000. Additionally, the city’s unassigned fund balance ratio fell from 170% to 143%.

05:06The audit also addressed internal control concerns that have persisted from the previous year. These included the need for audit adjustments to transition from cash basis to accrual basis accounting and the lack of segregation of duties due to limited personnel. The audit team noted that these issues could pose risks, emphasizing the importance of implementing oversight and controls. However, the city was commended for its compliance with Minnesota statutes, as no instances of non-compliance were found.