Financial outlook good for city

by Logan Gruber

operations@thenewsleaders.com

The city of Sauk Rapids’ financial health looks good according to Caroline Stutsman, an audit manager with Kern, DeWenter and Viere during her presentation of the 2014 city audit to the council on May 11.

Stutsman was invited to present by Jack Kahlhamer, financial director for the city.

The audit itself can be viewed on the city website, by navigating to ci.sauk-rapids.mn.us, hovering over “Departments” on the left-hand menu, hovering over “Finance” on the sub-menu, and then clicking on “Audited Financial Statements.” Once the page loads, you can view the audit for any year, from 2001 to present.

While Stutsman said the audit overall was very good, she and KDV did caution the city about their lack of segregation of 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.

Without segregated functions, there is an overlap of duties such as electronic funds transfers, payroll and receipting. Such overlaps could lead to inconsistencies, errors, misstatements and/or risks, according to the audit.

It was noted, however, that many cities of this size have some degree of lack of segregation of accounting functions. In the case of Sauk Rapids, she said, the situation is mild. In the audit, it was 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.

Other than this criticism, however, the report praises the city’s financial health.

Stutsman told the council they did a very good job budgeting, staying pretty much in line with their estimates at the beginning of the year.

Stutsman 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.
• General fund expenditures increased 4.4 percent from 2013 to 2014, mostly due to fewer months of vacant positions, as well as seal-coating and sand/salt for roads.
• The biggest piece of the general budget pie (46.1 percent) was for public safety. Public works accounted for 28.4 percent, general government 16.4 percent, culture and recreation 7.1 percent, and economic development 2.0 percent.
• Total revenues for 2014 increased slightly, by 0.4 percent, from the year before. The city remains heavily dependent on tax and intergovernmental revenues.
• Intergovernmental revenues increased 5.8 percent from 2013, while tax revenues decreased 4.7 percent. This is mostly due to a decrease in the property tax levy and an increase in local government aid received.

The city council typically meets at 6 p.m. on the second and fourth Mondays of the month in the council chambers at the Government Center, 250 Summit Ave. N. The meetings are also broadcast live on the city’s cable access channel, Charter channel 181. Agendas and meeting minutes may be viewed at the Government Center, or online at ci.sauk-rapids.mn.us.

Due to Memorial Day on Monday, May 25, the regular council meeting has been moved to Tuesday, May 26.