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Independent auditors give Dayton clean opinion on 2024 financials; fund balances and water/sewer trends highlighted
Summary
Burke (auditor) presented the 2024 audit, delivering a clean opinion on financial statements, noting a common segregation-of-duties finding, and summarizing increases in tax capacity, general fund balance growth, and water/sewer fund activity.
The council received a presentation of the city’s 2024 financial audit, which auditors summarized as a clean opinion on the city’s financial statements and no instances of noncompliance with state statutes tested.
Janelle, the lead auditor from Burke (presented as the auditor for the city), said the independent auditors’ report presents the financial statements fairly in all material respects. Their report under Government Auditing Standards noted 1 internal-control finding: lack of segregation of accounting duties because of limited staffing — a common issue for municipalities the city’s size. The State Auditor’s compliance tests returned no instances of noncompliance.
Auditors showed five-year trend graphs: the city’s tax capacity rose sharply in 2024 (one presentation slide showed a 26.5% increase in tax capacity for 2024 and that levy has risen 19% in 2024), general fund revenues exceeded expenditures and the general fund balance increased by about $443,000 in 2024 (roughly five months of expenditures and within the State Auditor’s recommended 35%–50% range), and general fund revenues were up about $1.9 million (around 30%) from the prior year. The auditors also highlighted increases in building-related licenses and charges for services.
Water fund results show operating income the last three years and growth in activity tied to new users; the SWIR (sewer/wastewater infrastructure) fund reported an operating loss of $595,000 for 2024 that included depreciation (without depreciation, the fund showed an operating income of about $195,000), and auditors noted the city is recovering approximately 25% of depreciation through charges, allowing money to be set aside for repairs and replacements.
Council members asked for clarification about communication-letter “significant risks” language; auditors explained that certain risk labels (revenue recognition, misappropriation of assets, management override) are required by auditing standards and are part of standard testing procedures, not findings of existing problems. Council also discussed that depreciation assumptions are conservative and that Met Council sewer charges are a significant ongoing cost the city will need to monitor.
No formal acceptance vote was recorded in the meeting minutes for the audit presentation; the presentation concluded with staff and council discussion about trends and follow-up questions on specific risk-descriptor language in the auditor communication letter.
