Moose Lake Star Gazette - Serving Carlton and Pine Counties Since 1895

By Oliver Dykstra
Moose Lake Star-Gazette 

Deficiencies found in Sturgeon Lake financial audit

 

December 19, 2019



The Sturgeon Lake City Council reviewed and accepted the findings of the 2018 audit report prepared by RSM. Councilmember Adam Langhorst presented the findings, first reporting that RSM issued an unqualified opinion. Sometimes called a clean audit, this is the best opinion a government or business can receive from an audit, and indicates that financial statements were fairly presented and accurate.

Next Councilmember Langhorst drew attention to three internal control deficiencies that were found.

According to the audit report submitted by RSM, “A deficiency in internal control exists when the design or operation of a control does not allow management or employees... to prevent, or detect and correct, misstatements on a timely basis.”

Of the three deficiencies found, one was a ‘Material Weakness’ and two were ‘Serious Deficiencies’.

The material weakness was found in the accurate and timely completion of financial statements. Councilmember Langhorst reported that a material weakness “is the most severe type of internal control finding that a government entity can have.” He continued to explain that RSM prepares the financial statements for the city, “however our responsibility is to provide them a trial balance that is accurate and complete which, for the 2018 audit year, was not the case.”

The first significant deficiency found that the city’s contributions to the General Employees retirement fund did not meet statutory requirements. The city’s contributions were $1,747 less that required by MN law. In addition to making the required contributions, RSM advised the city to “review the eligibility requirements for the General Employees fund and evaluate which employees are required to be enrolled.” Councilmember Langhorst reported that the city clerk is looking into corrective action regarding this deficiency.

The other significant deficiency found that there were three instances where the City did not comply with the Minnesota Legal Compliance Audit Guide for Cities. According to the report, “there was a breakdown in the City’s procedures related to transactions with contractors and interested officers and timely submission of fire relief aid to the volunteer relief association.”

Councilmember Langhorst acknowledged that the city may not fully resolve the deficiencies in preparation of financial statements, but was confident that the other deficiencies would “probably be resolved next year.”

Road Construction Collaboration Moves Forward

The council voted unanimously to collaborate with Pine County on road improvement projects slated to begin next year. The collaboration is expected to save the city nearly $50,000.

The projects, including the renovation of 2nd Street between Main Steet and Lake Street, as well as the paving of the north half of Cemetery Road, was estimated to cost $175,000 according to a report provided by HRGreen.

Councilmember Rick Lewis thought that estimate seemed high and pursued a meeting with Pine County Public Works Engineer, Mark LeBrun, in order to seek cost savings.

Lebrun, noting that Pine County had similar projects planned in the area, offered to wrap Sturgeon Lake’s plans in with the County’s. Pine County would be able to pay the upfront costs of engineering, project management, and construction. And, because of the efficiencies gained, would only ask the city to reimburse $100,000-$120,000.

Before the vote was taken, Councilmember Jess Langhorst gave her approval. “Being able to do this without raising the taxes, without having to put assessments on any of the landowners, I think this is a big win for the city.”

Fire Dept Garage Doors Getting Fixed

A contract with DC Garage Doors LLC was approved in order to repair the weather stripping on the garages in the firehall. The contractor estimated $1,018 including parts and labor.

Logging approved on Cathedral Pines

A motion to sell stumpage to Palmer Logging was approved. City-owned land along Cathedral Pines will be logged. A citizen spoke requesting a row or two of trees along the road be left standing to preserve the views. Mayor Danelski said that would not be an issue and assured the area would not be clear cut, and that he has instructed Palmer logging to avoid the large legacy trees.

Mail Balloting Q&A - Tuesday Jan 8, 3-7 p.m.

The county auditor will be at city hall to answer any questions about mail balloting. A notification will be published in the paper.

 

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