by Dennis Dalman
The City of Sartell earned a solid “A” grade in an audit of its 2014 finances, but the auditing firm cautioned the city about the lack of segregation of its accounting practices.
By “segregation,” the audit report means the city should not have various city staff do overlapping duties when it comes to the handling of finances and accounting. That, the report states, could have an adverse effect and hamper the city’s ability to initiate, record, process and report financial data information. There should also be limited access by staff to the general financial ledger.
The audit found no law-breaking, but it cautioned that lack of segregated functions can lead to problems.
A summary of the audit was presented to the city council at its April 13 meeting by Steve Wischmann of the St. Cloud accounting firm of KDV (Kern, Dewenter, Viere, Ltd.)
Without segregated functions, there is an overlap of duties such as cash disbursement, receipting and payroll processes. Such overlaps could lead to inconsistencies, errors, misstatements and/or risks, Wischmann said.
He added, however, that 90 percent of the cities his firm audits have some degree of lack of segregation of accounting functions ranging from mild to serious. In the case of Sartell, he noted, the situation is mild. He acknowledged it would likely be prohibitively costly to hire more staff to ensure complete segregation but that city staff should be aware of the situation and try to improve it.
In the case of Sartell, the audit report notes three city staff do overlapping work when it comes to financial and accounting functions – the deputy clerk/treasurer, the utility clerk and the city administrator/finance director.
Other than that criticism, however, the report praises the city’s financial health.
“There is good departmental budgeting,” Wischmann told the council. “You are living within your means. You did a very nice job on the budget…A very nice job. I would give you an A.”
Wischmann pointed out several highlights of the city’s financial picture for 2014.
- City expenses were nicely in line with its income and budget.
- There is a very healthy fund balance.
- Expenditures were almost identical to 2013.
- The general-fund expenditures for 2014 increased from the year before by $153,000, a 3.3-percent increase, and that was due mainly to costs for road salt and sealcoating.
- The biggest piece of the budget pie (45.5 percent) was for public safety (including police and fire). Public works accounted for 27.2 percent, general government 12.1 percent, public-safety inspections 6.1 percent, parks and recreation 4.6 percent, and community and economic development 4.3 percent.
- Total revenues for 2014 decreased slightly, by 2.8 percent, from the year before. The tax levy was also down a bit from 2013. Expenditures from the general fund increased by 3.3 percent, but a slight increase in local-government aid helped offset the imbalances.