Auditor: Ainsworth posts clean audit but debt rose with Main Street project

The Ainsworth City Council on Wednesday received a fiscal year-end audit presentation from Michael Hobach of NGL, who said the firm issued an unmodified opinion and a clean single-audit with no federal findings.

Hobach told the council that the year included major capital spending — roughly $2.1 million on the Main Street rehabilitation — and that the city’s outstanding debt rose to about $2,740,000 as of Sept. 30, 2024. He said the audit presents the government funds on a modified cash basis and stressed that the general fund held about $1.3 million in cash, of which roughly $358,000 was unassigned and available for discretionary use.

The auditor highlighted several financial details and operational notes: the monthly tower lease currently pays $780.35 with a 3% annual escalator; the water fund showed grant-related revenue that materially increased reported revenues; and the utility funds held stronger cash reserves than the general fund.

Hobach also gave a short list of audit comments and recommendations, including monitoring utility rates for adequacy, following up on seven long-outstanding checks in the water service deposit account, reconciling duplicate deposits in the checking account, and recording interest on certificates of deposit. "We don’t have segregation of duties," Hobach said, noting that small municipalities commonly face that limitation and urging continued council oversight of finances.

In benchmarking, Hobach said Ainsworth’s sales-tax receipts per capita were high for its peer group, but net position and some reserve ratios remain below recommended targets owing to recent capital borrowing. Council members said they will address some allocations during the upcoming budget process and review administrative cost allocations to avoid over-squeezing the general fund.

The council took no formal action on the audit itself; staff will bring related budget and rate recommendations to future meetings.