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08.a 2025 Audit Presentation
City of Scandia, Minnesota Presentation of the Audited Financial Statements Fiscal Year Ended December 31, 2025 Audit Process and Opinion Unmodified (Clean) Opinion General Procedures Obtain Records Inquiries Analytical Procedures Sampling Detail Testing Required Communications Audit went smoothly Positive Working Relationship with Management Nothing unusual noted in terms of recorded transactions or accounting policies/treatments Significant estimates for - Net Pension Liability/Balances Internal Controls Over Financial Reporting AUDIT ADJUSTMENTS SEGREGATION OF DUTIES FINANCIAL STATEMENT PREPARATION •Various adjustments recorded during our audit process •Your City has a lack of proper segregation of duties, which is very common for a City of your size •We have prepared the financial statements on behalf of the City Minnesota Legal Compliance •Areas Reviewed •Contracting and Bidding •Depositories of Public Funds •Conflicts of Interest •Public Indebtedness •Claims and Disbursements •Miscellaneous Provisions •Findings: •None Revenues were over budget by $67,452 Expenditures were under budget by $18,132 2024 2025 2025 Budget Revenues 2,341,684$ 2,464,407$ 2,396,955$ Expenditures 2,186,173 2,347,953 2,366,085 Other Sources (Uses) (125,000) 599,889 - Change in Fund Balance 30,511 716,343 30,870 Fund Balance 1,390,153$ 2,106,496$ N/A $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 2021 2022 2023 2024 2025 2025 Budget General Fund - Trend Analysis & Budgetary Comparison Revenues Expenditures Fund Balance Detailed Revenue AnalysisGeneral Fund Taxes Licenses, Permits, and Fees Inter- governmental Charges for Services Fines & Miscellaneous Interest Income 2024 1,862,265 237,885 106,841 62,311 31,762 40,620 2025 1,897,893 289,245 95,760 71,123 44,245 66,141 2025 Final Budget 2,049,086 183,100 63,000 54,213 17,556 30,000 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Detailed Expenditure AnalysisGeneral Fund General Government Public Safety Public Works Parks and Recreation Capital Outlay 2024 606,323 691,495 712,183 147,653 28,519 2025 698,386 735,524 733,398 163,605 17,040 2025 Final Budget 673,467 652,281 810,800 190,837 38,700 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 City policy is to maintain as unassigned general fund balance that falls within 50%-65% of the total annual General Fund operating expenditures 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 2021 2022 2023 2024 2025 Unassigned Fund Balance as a Percentage of the Annual Budget Year Percentage 2021 74.9% 2022 70.7% 2023 61.2% 2024 58.6% 2025 88.6% Cash Trend AnalysisGeneral Fund $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2021 2022 2023 2024 2025 General Fund Financial Highlights Other Governmental Funds $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 Capital Improvement Fund Equipment Replacement Fund Revenues Expenditures Fund Balance Capital Improvement Fund Equipment Replacement Fund Revenues 388,088$ 305,499$ Expenditures 465,696 1,383,603 Other Sources (Uses)- 640,000 Change in Fund Balance (77,608) (438,104) Fund Balance 459,614$ 267,877$ Cash Trend Analysis Other Governmental Funds $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 2021 2022 2023 2024 2025 Capital Improvement Fund Equipment Replacement Fund Financial Highlights Other Governmental Funds *Financial data for remaining nonmajor governmental funds can be found beginning on page 72 in the Audited Financial Statements. Local Road Improvement Fund Debt Service Fund Revenues 501,825$ 522,850$ Expenditures 626,436 568,573 Other Sources (Uses) 45,764 (645,653) Change in Fund Balance (78,847) (691,376) Fund Balance 473,739$ 138,589$ $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Local Road Improvement Fund Debt Service Fund Revenues Expenditures Fund Balance Cash Trend Analysis Other Governmental Funds $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2021 2022 2023 2024 2025 Local Road Improvement Fund Debt Service Fund Historical Trends Big Marine Sewer Fund $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 2021 2022 2023 2024 2025 Operating Revenues Operating Expenses 2021 2022 2023 2024 2025 Operating Revenues 106,001$ 109,783$ 147,546$ 118,317$ 122,950$ Operating Expenses 101,246 117,062 119,397 137,670 113,883 Operating Income (Loss) 4,755 (7,279) 28,149 (19,353) 9,067 Nonoperating Revenues & Transfers In 832 3,841 1,968 1,764 28,176 Nonoperating Expenses & Transfers Out - - - 17,584 7,719 Change In Net Position 5,587 (3,438) 30,117 (35,173) 29,524 Ending Net Position 833,692$ 830,254$ 860,370$ 825,198$ 854,722$ Historical Trends Uptown Sewer Fund $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 2021 2022 2023 2024 2025 Operating Revenues Operating Expenses 2021 2022 2023 2024 2025 Operating Revenues 15,132$ 17,442$ 22,166$ 26,693$ 34,247$ Operating Expenses 19,582 21,515 23,299 19,399 10,005 Operating Income (Loss) (4,450) (4,073) (1,133) 7,294 24,242 Nonoperating Revenues & Transfers In 71 84 327 161 1,154 Change In Net Position (4,379) (3,989) (806) 7,455 25,396 Ending Net Position 165,069$ 161,080$ 160,274$ 167,729$ 193,125$ Historical Trends Anderson- Erickson Sewer Fund 2021 2022 2023 2024 2025 Operating Revenues -$ -$ -$ 51,796$ 45,346$ Operating Expenses - - 4,321 23,169 23,114 Operating Income (Loss) - - (4,321) 28,627 22,232 Nonoperating Revenues & Transfers In - - - 17,584 1,563 Change In Net Position - - (4,321) 46,211 23,795 Ending Net Position -$ -$ (4,321)$ 41,890$ 65,685$ $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2023 2024 2025 Operating Revenues Operating Expenses Cash Trend Analysis Business- Type Funds $(20,000) $- $20,000 $40,000 $60,000 $80,000 $100,000 2021 2022 2023 2024 2025 Big Marine Sewer Uptown Sewer Anderson- Erickson Sewer Government-Wide Assets $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 Current Assets $4,738,187 $4,468,956 $3,879,220 $4,708,612 $5,514,216 Capital/Noncurrent 15,899,654 16,185,188 16,690,697 19,467,247 20,951,226 Government-Wide Liabilities $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 Current Liabilities $523,441 $598,068 $526,477 $523,938 $518,692 Debt/Noncurrent 3,480,490 3,142,000 2,860,273 6,577,403 6,948,289 Net Pension Liability 286,330 676,594 402,861 284,179 261,054 Governmental FundsFuture Debt Payments - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 Governmental Funds Future Debt Payments Gov Activities Principal Gov Activities Interest Questions? Ryan Schmidt, CPA Partner rschmidt@swco.cpa 320-251-0286