Council accepts clean 2025 audit, approves report and financials

An external auditor presented the city's 2025 financial audit and the Paynesville City Council voted to accept the report.

The auditor told the council the audit work included tests of invoices, state funding reports, property-tax records and internal controls and that the team issued an unmodified opinion, commonly called a clean audit. The auditor said revenues across the general fund were slightly above budget (about $170,000) while expenditures exceeded budget by about $132,000, producing a roughly $48,000 increase in the general-fund balance for 2025.

The auditor reviewed internal-control observations, noting routine audit adjustments, a segregation-of-duties concern where individuals have broad access to the accounting system and the fact that the city uses a third party to prepare financial statements. The presenter also walked through fund-level results: modest increases in cash across several funds, airport fuel-cost increases, and liquor-store expenses related to building and bond issuance costs. The sewer fund showed larger operating-revenue gains versus the prior year.

Council members asked clarifying questions about the meaning of "unassigned fund balance" and whether reserves met policy targets; the auditor explained the ratio represents reserves as a percentage of annual expenditures and said the city remained above its target (about 67% versus a 55—60% policy target). No statutory compliance issues were reported.

The council moved and seconded approval of the 2025 audit and the motion carried with one member recorded as opposed. The action completes the city's formal acceptance of the audit and positions staff to publish and file the financial statements as required.