Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Audit topic
No spam. Unsubscribe anytime.
Farmington accepts 2025 audit with clean opinion; auditors note two control deficiencies
Summary
The council accepted the city's 2025 audited financial statements and the federal single audit, which auditors said received an unmodified (clean) opinion; auditors reported two internal-control deficiencies (suspension/debarment documentation and a misdated federal expenditure) and no Minnesota compliance exceptions.
Farmington's City Council accepted the 2025 annual comprehensive financial report and associated independent auditor reports on July 6 after a presentation from LB Carlson.
Kim McGinn introduced auditor Bill Lower, who told the council the auditors issued an unmodified (clean) opinion on the city's financial statements and an unmodified conclusion on the federal single audit. "We were once again able to provide an unmodified opinion on the basic financial statements," Bill Lower said, describing that as the highest standard of audit opinion.
Lower identified two internal-control deficiencies. The first involved documentation supporting suspension and debarment checks for parties to federally funded contracts; auditors said the city performed the checks but did not retain dated evidence (screenshots or equivalent) to document when the checks were done. The second related to the schedule of expenditures of federal awards: one invoice included in the 2025 schedule was actually incurred in 2024; auditors said the item was corrected during the audit and did not affect the overall audit conclusions.
Lower also reviewed fund-balance and enterprise fund results: governmental funds ended 2025 with about $41.5 million in total fund balances (an increase of roughly $4.5 million from 2024), the general fund near $13 million, and enterprise net position of roughly $76 million across water, sewer, stormwater, streetlight utilities and municipal liquor operations. He noted policy guidance that the city's target unassigned general fund balance is about 40% of the next year's budgeted expenditures and said the city was well above that target at roughly 69%.
Council members asked for context about high fund balances and communication to taxpayers; Lower said the state's guidance typically cites a 40% to 50% range for cash-flow reasons and that the city's policy is consistent with best practices.
The council moved and accepted the audited financial statements and independent auditor reports; the motion passed on a roll call recorded in the transcript as affirmative votes from council members present.
