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Orono audit: 2024 financial statements receive unmodified opinion; fund balances stay near policy
Summary
External auditor Andy Berg told the Orono City Council the 2024 financial statements will receive an unmodified (clean) opinion and that most funds performed close to budget, though timing of bond proceeds and interfund transfers affected cash balances and some fund-level deficits.
Andy Berg, audit partner with ABDO, told the Orono City Council the firm will issue an unmodified (clean) opinion on the city’s 2024 financial statements and a clean Minnesota legal compliance report.
Berg told the council the general fund’s unassigned portion of fund balance is presented separately from other components and that the city’s fund-balance policy was reduced from 45% to 40% in 2024; the unassigned portion shown in the presentation was about 39.2%, which prompted a council question about the 0.8 percentage‑point gap. “So the number we’re presenting here is just the unassigned portion of the fund balance,” Berg said, explaining page 32’s numbers include additional components.
Why it matters: the unassigned fund balance supplies reserve cash for the first half of the fiscal year before property-tax receipts arrive. Berg said total fund balance increased by just under $560,000 in 2024, ending just under $4.8 million, and he walked council through revenue and expenditure variances that produced that net change.
Key figures and context: Berg reported total budgeted revenues around $11.9 million, with actual revenues roughly $457,000 over budget and expenditures about $135,000 under budget. He flagged nearly $16 million of outstanding bonds (2020 and 2021 series) with maturities out to about 2051 and described the expected drop in principal-and-interest obligations as the 2021A bonds mature. Berg also reviewed enterprise funds, noting a roughly $1.0 million transfer from the water fund in 2023 to support capital projects such as water-main replacements.
Council questions focused on presentation detail and timing. One councilor noted a discrepancy between the 40% policy and the presented unassigned figure; Berg answered that the presentation isolates the unassigned component, while the report’s page 32 reflects the full fund-balance calculation.
What happens next: Berg closed by offering to take questions on the presentation or the full financial statements included in the council packet. Council members had no further substantive audit questions and thanked Berg for the presentation.
