Delano receives clean 2025 audit; auditors note recurring material weaknesses

City auditors told the Delano City Council on Tuesday that the city will receive an unmodified (clean) audit opinion for 2025, but they also highlighted recurring internal control issues that the City should address.

Brian Bloch introduced Chris Knopik, Principal, and Ezra Koetz, Manager, from CLA. Knopik said the City will receive an "unmodified (clean) audit opinion, the highest level of assurance available," while identifying two material weaknesses consistent with prior years: segregation of duties due to limited staffing and the City's financial statements being prepared by CLA.

Knopik also reviewed compliance findings including outstanding checks more than three years old that should be remitted to the State as unclaimed property, the need to formally include the City's employee recognition event within an approved wellness plan, and submission of a previously decertified TIF district notice to the State Auditor's Office.

Koetz reviewed financial results: governmental revenues increased largely because of property taxes and intergovernmental revenues; the General Fund ended 2025 with an unassigned fund balance of approximately $4.3 million (an increase from the prior year) and reserves sufficient to sustain operations for about ten months. He also reviewed enterprise funds, including sewer operations and the municipal liquor store.

Discussion touched on sewer fund pressures (aging treatment plant, biosolids handling and phosphorus treatment costs) and the municipal liquor store's performance (profit margins consistently exceeding 25 percent). Knopik concluded with an overview of upcoming GASB reporting standards that will require additional disclosures and reporting changes.

Council did not take formal action at the workshop; staff will pursue the compliance follow‑ups described by the auditors.