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Brainerd BPU audit: clean opinion, few late invoices and rate-driven revenue shifts
Summary
Auditors gave Brainerd Public Utilities a clean (unmodified) opinion on its 2025 financial statements, reporting no internal-control findings but noting a small number of late vendor payments (interest paid). Staff and commissioners discussed rate drivers, credit-card convenience fees and revenue timing.
Brainerd Public Utilities received a clean, unmodified audit opinion for fiscal 2025, an external auditor told commissioners at the utility’s June 30 meeting. Eric of CliftonLarsonAllen said auditors found no material adjustments or internal-control findings and no disagreements with management.
"We did have a clean unmodified opinion which is the highest level of opinion we can give," Eric said in his presentation of required communications and results. He told the commission that auditors reviewed management estimates and disclosures, found them adequate and had no difficulties with management during fieldwork.
The audit noted two operational matters: several vendor invoices were paid later than the 35-day window required by statute, and interest was paid as required. Commissioners pressed staff on why invoices were late and the total cost. Eric said late payments were isolated and tied in part to director transitions. Danny, a utility staff member, said the utility has implemented an accounts-payable automation module to reduce late payments.
Commissioners also focused on department-level trends Eric presented. He said electric revenues rose in 2025 largely because of rate increases and higher purchase-power costs; water revenues showed a sizable increase tied to a December 2024 rate; and wastewater saw rate-driven revenue increases but higher operating expenses. After nonoperating revenues such as sales tax and interest, the utility recorded a positive net change in position driven in part by those nonoperating items.
On convenience fees for credit-card payments, Danny told commissioners that the collection of the fee began in March 2026 and that the intent is to make the fee revenue-neutral: the fee collected from customers should offset the processing charge the utility pays.
Why it matters: a clean audit signals the utility’s financial statements are fairly presented, which supports contractor confidence, bond markets and public trust. The commissioners asked staff to continue work on AP automation and to provide additional detail on the dollar magnitude of the late-payment interest for follow-up in the next reporting cycle.
The commission took no discrete action on the audit other than discussion and questions; the auditor left the meeting after the presentation.
