Brookings audit shows clean opinion, strong cash position; council hears 2023 financial report

City auditors told the Brookings City Council that the city received a clean (unmodified) opinion on its 2023 financial statements and related federal single-audit work, with no audit findings.

Brian Stavanger, a partner at the audit firm who presented the high-level results, said the financial-statement audit and the federal program audit (including coronavirus state and local fiscal recovery funds) produced no findings. Stavanger said the city reported just over $60 million in cash and investments on a city-only basis at the end of 2023 and that the city’s liquidity ratio has remained well above commonly recommended minimums — noting the city’s position was generally above 3x over the last decade and above 5x at year-end 2023.

The presentation explained how the report separates governmental funds (the city’s primary operating accounts) from enterprise funds (liquor, airport, golf, solid waste and similar business-type funds). Stavanger noted roughly $1.7 million of items in the proposed capital scope matched projects already in the city’s five-year capital improvement plan, and he described one new accounting standard adopted during the year that audit staff reviewed and agreed with.

Stavanger highlighted the city’s unassigned general-fund balance — the portion most commonly referenced as a “rainy day” reserve — which he said equated to just under six months of expenditures (about 48–49% of annual expenditures) at the end of 2023. He reminded the council that best practices vary; many local governments target at least two months of reserves, while several peer cities aim near 50% depending on capital plans and debt strategies.

Council members asked questions about cash-versus-investment mixes and how increased interest rates affected classification. Stavanger said higher market yields led the city to hold more short-term instruments that appear as cash on the statements while locking in better returns, and he said those choices reflect the city’s investment policy and risk tolerance.

The audit presentation concluded with graphs showing revenue and expenditure trends, fund-balance breakdowns, and discussion of planned uses for reserves tied to the city’s capital plan. Stavanger closed by offering to answer follow-up questions and invited councilors to review the complete 165-page comprehensive annual financial report for full details.

The council took no formal action on the audit during the presentation beyond questions and acknowledgement; staff will file the annual comprehensive financial report as prescribed by state law.