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Baker Water and Sewer GID must obtain audit after SRF grants push spending over exemption limit
Summary
Department staff told the committee that Baker Water & Sewer GID exceeded the $300,000 exemption threshold after emergency repairs funded by state revolving funds, meaning the GID must produce an external audit; the district described its limited customer base and the financial strain of audit costs.
The Committee on Local Government Finance was told April 29 that Baker Water and Sewer General Improvement District exceeded the statutory $300,000 expenditure threshold for audit exemptions in FY2024, requiring the district to secure an external audit.
Department budget analyst Lynn Lukacs reported that FY24 expenditures totaled about $376,340, above the exemption limit, after the district used State Revolving Fund (SRF) monies for emergency infrastructure repairs. Because the exemption is conditioned on staying below the threshold, Lukacs said the exemption is no longer applicable and an audit report is now required.
District perspective: Terry Stedman, treasurer for Baker Water and Sewer GID, told the committee the system serves about 104 service connections and a population under 200; he said finding an auditor willing to travel to Baker, Nevada, and the cost of a first‑year audit are both significant obstacles. Stedman said the audit could cost substantially more than routine audits and that SRF project grants have monetary limits that complicate budgeting.
Committee suggestions and next steps: Members recommended Baker pursue SRF project funds or contact the Office of Financial Assistance at NDEP to determine whether audit costs could be covered as project‑related expenses. Member Paul Johnson offered to contact a firm that audits White Pine County schools to see whether local auditors could assist. The committee said it could not grant an exemption in violation of statute and advised the district to request an extension and work with department staff to arrange an acceptable path to compliance.
Context: Committee members noted that first‑year audits are often more expensive because auditors must reconstruct records and establish beginning balances; the department and members urged Baker to solicit bids and consider county assistance or state SRF options.
