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Sarpy County and Cities Wastewater Agency presents clean audit, flags internal-control risks
Summary
The agency received an unmodified audit opinion for fiscal year ending 6/30/2025 and a financial dashboard showing $10.3 million in cash on hand; auditors noted persistent internal-control segregation risks due to small staff.
The Sarpy County and Cities Wastewater Agency received an unmodified audit opinion for the fiscal year ended June 30, 2025, and reviewed a monthly financial dashboard showing roughly $10.3 million in cash on hand.
Auditor Tim Lens of Bergen KTV told the board the auditors "opine on ... these financial statements as presented are materially correct in accordance with standards" and reported the single-audit testing of federal programs showed compliance for the programs tested. Lens said the agency expended approximately $14,000,000 in federal funds during the fiscal year and that the auditors issued separate reports this year because a federal compliance supplement was issued late due to a federal shutdown.
The audit also noted continuing internal-control challenges. "It's nearly impossible to segregate all duties" in an agency of this size, Lens said; last year's material weakness related to journal entries has improved to a significant deficiency this year.
Treasurer Mark Setout walked the board through the agency's dashboard and recommended not tying up additional cash beyond the $2,000,000 already invested in a certificate of deposit. "Based on my analysis, I would not recommend tying up additional cash beyond the $2,000,000 that we already have invested in the CD," Setout said. He reported about $1.5 million in annual debt service payments due for SRF loans, a reserve loan balance target of $1.5 million, and a current reserve balance of $594,000.
Setout told the board connection fees are holding at about $1,900,000 and that billed flow revenue stands at roughly $338,000 for the year, while total revenue reported on the dashboard was about $2,600,000 (about 86% of budget). He noted net income was negative for the first time this fiscal year because of a $750,000 SRF invoice received in November and set to be paid Dec. 12.
Project engineer Jeff Thompson updated the board on the WIFIA modification and said federal legal review has been delayed by the federal shutdown: "I was supposed to have a draft from their legal team the Friday before Thanksgiving. That did not come," he said, adding he has been following up and hopes to resolve it before year-end.
The board directed staff to continue working with auditors and lenders and to bring back any policy or budget items as needed. The agency's next meeting is scheduled for Jan. 28, 2026.
