Sawyer County receives clean 2024 audit but long-running segregation-of-duties weakness remains

CliftonLarsonAllen presented Sawyer County's 2024 audit to the county finance committee, delivering an unmodified audit opinion while cautioning that a longstanding material weakness remains in the county's segregation of financial duties.

The auditor, April of CliftonLarsonAllen, told the committee the firm "issued an unmodified audit opinion on your financial statements for 2024," the highest level of audit assurance, and said the county met single-audit compliance for federal and state grants. At the same time she reported a continuing material weakness: "limited segregation of duties," a structural issue in small governments where single staff members hold multiple access points in financial processes.

Why it matters: an unmodified opinion indicates the county's statements fairly present its financial position, which matters for bond markets, lenders and taxpayers. The persistent segregation-of-duties weakness means there is elevated risk that errors or irregularities could occur without timely detection; auditors said the county mitigates some risk through supervisory reviews and approvals.

The audit highlighted several financial results. The county's overall fund balance rose by about $875,000 from 2023 to 2024, to roughly $13,000,000; the auditor reported an unassigned fund balance of about $9,779,000, representing approximately a 60.8% ratio of unassigned fund balance to general fund annual expenditures (county policy target cited at 20%–30%). April attributed the increase to stronger sales-tax receipts, robust stumpage revenue and higher interest earnings, and she noted some expenses came in under budget. She also identified transfers that supported Health & Human Services (HHS), including a $1.3 million transfer in 2024 to stabilize that fund.

Public comment at the start of the meeting raised presentation and transparency questions. Linda Zilmer, who identified herself as an Edgewater property owner and taxpayer, asked that the full 94-page audit report be presented to the full County Board and requested that the auditors explain whether the county has written internal controls and whether the audit team tests them. April affirmed the audit process includes required internal-control communication and testing and said the county has review and approval processes to mitigate the segregation issue.

County staff said the number of formal audit findings has declined. Finance staff noted that when current staff (Randy and Mike were referenced) arrived there were three findings; two have been resolved (audit adjustments and reliance on auditors for financial statement preparation), leaving only the segregation-of-duties issue, which staff said is difficult to eliminate given the county's size. Staff credited internal changes for eliminating the other findings and said they are working on mitigation strategies for the remaining weakness.

What's next: No formal board action on the audit was taken during the meeting beyond discussion; the auditor made the full report available to committee members. A public commenter asked the committee to present the full report to the County Board, a request committee members acknowledged for follow-up.

(Reporting based on Sawyer County Finance Committee meeting transcript.)