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Auditors report clean 2024 opinion for East Grand Forks, note fuel inventory and special-assessment shortfalls
Summary
External auditors told the council they expect an unmodified opinion on the 2024 financial statements and a clean single-audit on federal grants, while flagging process improvements: monthly fuel-inventory reconciliation, timely pension reporting, and a shortfall in special assessment fund 539 requiring transfers.
External auditors reported an unmodified, or "clean," opinion on East Grand Forks' 2024 financial statements and said single-audit testing of federal coronavirus funds produced no compliance findings, while recommending a few administrative improvements and pointing out several fund-level issues.
"We plan to issue an unmodified opinion on the financial statements," the auditor told the council during the review of the draft annual comprehensive financial report, noting the report remains in draft form while staff incorporates late items such as fire department data. The auditors also confirmed a clean report on Minnesota legal compliance testing.
The auditors cited the city's full-accrual net position at about $22,714,792 and noted the general fund balance of roughly $8.19 million. They flagged a deficit in the city projects fund ($331,724) that the city is addressing with planned transfers and noted that special assessment fund 539 has insufficient resources because a number of property owners paid off assessments early, reducing expected interest income.
As part of best-practice recommendations, auditors urged monthly reconciliation and quarterly testing of the city's fuel inventory and timely updates to pension reporting records after an instance where a terminated employee was not removed promptly from the system. Auditors also reminded the council about increased cyber-fraud risks and the need for verification when electronic payment details are changed: "If you ever get a request to change a routing number, account number, please follow that up with a phone call," the auditor said.
Council members asked clarifying questions about the fuel inventory checks and the auditors said the inventory is now being reconciled monthly and that the fuel tank testing had passed. The auditors said the report will be finalized prior to the June 30 filing deadline.
No formal votes were recorded during the presentation; staff and council indicated they would continue working with auditors to finalize the report.
