Mendota Heights receives clean FY2025 audit; auditors note routine internal-control finding

Caroline Stustman of BerganKDV presented the City of Mendota Heights’ FY2025 audit to the City Council on June 16 and reported an unmodified (clean) opinion on the financial statements. Stustman said auditors noted one internal-control finding—lack of segregation of accounting duties—a common finding for smaller municipalities, and reported no instances of legal non-compliance.

Councilor Maczko asked for clarification on a Pilot Knob improvement showing an $85,000 deficit fund balance; Finance Director Kristen Schabacker (recorded in meeting minutes with two spellings) explained the city has been incurring project costs and will reimburse those costs from an awarded state bonding allocation of $1,850,000. Councilor Maczko also asked about language in the audit related to investment risk; Stustman said the comment reflected the city’s portfolio and insurance coverage. On leases receivable, Stustman said required accounting treatment splits lease payment into principal and interest; the leases in question relate to cellular providers on the city’s water tower.

Councilor Paper asked whether the city essentially holds about $29 million in cash and investments; Stustman replied that the figures in the financial statements reflect the city’s current investments. Councilors thanked Finance staff for their work; Councilor Mazzitello and Mayor Levine offered public recognition of the finance team.

The audit presentation concluded with the council acknowledging the report and staff. No formal vote was required to accept the audit presentation; the council commended staff for stewardship and noted the city’s AAA bond rating as evidence of strong fiscal management.