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Detroit Lakes accepts 2025 audit; auditors flag segregation-of-duties and one prompt-payment lapse
Summary
Bergen KDV issued an unmodified (clean) opinion for Detroit Lakes' 2025 financial statements but reported one internal-control finding (overlapping accounting duties) and one Minnesota legal-compliance finding for a late vendor payment; council voted to accept the audit report.
The Detroit Lakes City Council on June 9 voted to accept the city’s 2025 audit following a presentation by Bergen KDV auditor Janelle Bitson.
Bitson told the council the firm issued an unmodified opinion—commonly called a clean opinion—stating the city’s financial statements "present fairly in all material respects." She said the firm issued three reports: the independent auditor’s report, a report under Government Auditing Standards (which found one internal-control issue), and a report on Minnesota legal compliance (which listed a single prompt-payment finding).
On internal controls, Bitson said the firm’s only comment was a lack of segregation of accounting duties in the finance area, a common finding for cities of Detroit Lakes’ size due to limited staff. On compliance, she reported one vendor payment that was not paid within Minnesota’s 35-day prompt-payment requirement. Bitson emphasized there were no material misstatements and no other compliance exceptions disclosed.
Bitson also summarized key financial trends in the presentation materials: general fund revenues increased about 11.3% (roughly $854,000) in 2025, driven by a higher tax levy, additional grants and increased building permit revenue. Expenditures rose about 11.7% (roughly $925,000), reflecting higher wages, salaries and benefits plus increased snow-removal and repair costs. The city ended 2025 with a general-fund balance of about $7.4 million, approximately $4.3 million unassigned, which Bitson said is roughly 44% of next year’s budgeted expenditures and within the city’s 35–50% policy range.
Bitson said the city’s enterprise funds (electric, water, wastewater, liquor) showed positive operating results in 2025. Council members had no substantive questions about the audit; Alderman Mike moved and the council voted to accept the audit report as presented.
Accepting the audit puts the city on record with a standard unmodified opinion while directing staff to continue monitoring internal-control segregation and to address the prompt-payment exception noted in the compliance report.
