Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Auditor flags recurring control gaps; council approves audit and moves excess funds to capital outlay
Summary
An auditor told the Slayton council of two Minnesota legal-compliance exceptions and recurring internal-control weaknesses, recommended moving an identified $126,135 excess from the general fund into capital outlay, and the council voted to authorize submission of the 2024 audit and approve the transfer.
An auditor presented the draft 2024 financial statements and single-audit findings to the Slayton City Council on July 24, saying the city had two Minnesota legal-compliance exceptions and several recurring internal-control deficiencies.
The presenter told the council auditors found two compliance items (checks paid outside the 35-day window and a late reimbursement to the fire relief association) and four recurring internal control deficiencies: the city’s reliance on auditors to prepare financial statements, limited segregation of duties because of staffing levels, material adjustments made by auditors, and intermittent untimely bank reconciliations. The presenter said those are common in smaller cities but urged corrective steps.
Why it matters: the auditor identified a $126,135 excess in the general fund above the city’s minimum fund balance policy and recommended transferring that amount to the capital outlay fund to better align reserves and capital needs. The presenter explained the minimum fund balance policy requires about $893,488 and the city’s unassigned balance exceeded that threshold.
Council discussion focused on timing and accounting mechanics: members asked about whether funds could be earmarked for specific projects or temporarily held until final allocations are settled. The auditor advised establishing clearer GL codes and consistent procedures for transfers, and confirmed the transfer could be completed in the current year if the council chooses.
The council moved and seconded the suggested transfer of $126,135 to capital outlay; the voice vote included one stated opposition but the motion carried. The council then moved, seconded and voted to authorize submission of the presented and amended 2024 audit; that motion also carried.
The auditor also reviewed other fund-level variances and singled out a large miscellaneous electrical-analysis expense tied to the city’s Excel (electric) transition that the city expects to recoup if an electric fund is established. The presenter reiterated recurring recommendations: timely bank reconciliations, clearer expense coding and documenting reviews to reduce future compliance findings.
Next steps: the council approved the audit submission and the transfer; staff will implement the transfer to the capital outlay fund and follow-up on auditor recommendations, including GL code changes and reconciling practices. The auditor said the city will receive final reports for review before federal and state submissions.
