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Dell Rapids receives clean 2023 audit; federal ARPA review draws qualified finding
Summary
Auditors told the council the city’s 2023 financial statements earned an unmodified (clean) opinion, but the separate federal single-audit found reporting and procurement-policy issues tied to ARPA funds. Council accepted the audit and will amend federal reporting as needed.
Courtney Richmond, audit senior manager with I Bailey, told the Dell Rapids City Council the city received a clean (unmodified) opinion on its 2023 financial statements. "The city received a clean audit opinion for 2023," Richmond said, adding that the firm did not identify any material misstatements in the financial statements.
Richmond said the city triggered a federal single-audit in 2023 because it spent more than $750,000 in federal funds. That federal audit resulted in a qualified opinion specific to the ARPA program and two federal compliance findings: a reporting mismatch between what was reported for ARPA spending and what was spent, and the absence of a procurement suspension-and-debarment policy required when federal funds are used. "For 2023, the city spent approximately $1,900,000 of federal funds, and received a qualified opinion over the ARPA program," Richmond said. She also noted the reporting discrepancy can be amended on the next federal report.
Richmond reviewed the city’s fund balances and operating results: the general fund ended 2023 with roughly $5.5 million, an operating shortfall of about $970,000 (better than the $2.1 million deficit the budget had projected), operating income of about $137,000 for the water fund and an operating loss of roughly $29,000 for the wastewater fund. She said the city had issued a $2 million bond in 2022, which contributed to 2022 balances and a modest 2023 decrease in cash and investments.
Council voted to accept the audit and to submit the final audit documents to the state; staff and auditors said the state review (DLA) had already provided feedback on draft financial statements. Richmond emphasized the firm’s work was a risk‑based sampling audit rather than a 100% transactional review. The council did not take additional formal direction beyond filing the audit and addressing the federal reporting amendment.
