2 weeks Ago By Shelby Lindrud
WILLMAR — The Kandiyohi County Board recently took a close look at the financial health of the county, or at least where it was at the end of 2023. Staff from CliftonLarsonAllen LLP presented the 2023 audit at the Nov. 5 meeting.
According to the report, total revenue of $100,754,015 exceeded expenditures by $8.3 million in 2023, thanks partly to increased tax revenue, American Rescue Plan Act funds, and federal grants for road construction projects. The largest jump in revenue came from the county's investments.
Investments rose $6.8 million. However, that money isn't exactly available for the county to spend.
"That is kind of just on paper because the county is not going to sell all of its investments," said Doug Host, an assurance principal from CliftonLarsonAllen's Baxter office, adding that the year before, the county's investment income had dropped $2.2 million. On the other side of the ledger, expenditures totaled $92,432,314.
Driving expenses were American Rescue Plan Act projects and a high level of road and bridge work. Public Safety also saw an increase due to spending more for inmate care at the jail. There were also county facility repairs, such as heat pump replacements, and purchase of new equipment.
"Every road and bridge fund I see is a little bit like a roller coaster because of the timing of when the expenditures are incurred and when the reimbursements come," Host said. "It's pretty normal to see fluctuations there." Even with the increase in both expenditures and revenue in 2023, the county's fund balance ratio between the two remained around 8.
6 months, meaning the county had 8.6 months' worth of expenditures in the unrestricted fund balance. The target is to have no less than 5 months, and Kandiyohi County has been above that threshold for several years.
"It is pretty obvious that there is one word to describe it, and that is consistent and stable over the last five years," Host said. "To maintain that stability is a pretty neat thing, if you ask me." Because Kandiyohi County spent more than $10.
6 million from federal grants in 2023, the firm had to perform a single audit to make sure the county was compliant with federal requirements. There were no material weaknesses found, but there were some significant deficiencies, mostly around processes and procedures when completing the reports required by the various grants. "We like to call it an audit trail.
We know there are plenty of eyes on these reports that you guys are putting out and reporting to the federal government. But when we come in, we need to see maybe a physical sign-off for an email saying that the review was done," said Liz Michelson, the county's audit manager from CliftonLarsonAllen. "When we come out and we start asking questions and support for federal programs for the first time, it's not unusual at all to have some of these findings listed.
" Moving forward, commissioners did have questions about the county's financial health moving into the future, with higher staff costs and levy increases. With the county's preliminary levy set to increase 8.5% next year, Commissioner Corky Berg asked whether the county is financially stable enough currently to think about reducing the levy increase for next year.
While Host said the auditor had to remain independent, he did say there are two sides of the question to look at. While keeping levy increases low may be popular, on the flip side suddenly raising it a massive amount because the county wasn't keeping up with expenses and needs is never good either. "What I am hearing from you then is we can look at it, but be cautious," Berg said.
The county could also be facing additional costs from new state programs as well as from county facility needs. While some state programs come with funding, others do not. "If they're mandated, you've got to find the money from somewhere," Host said.
Host commended the staff at Kandiyohi County for their hard work and understanding during the audit. He said the auditors ask a lot of questions, ask for a lot of documents and then usually have more questions. Yet the staff at Kandiyohi County were great to work with and nice to the auditors, Host said.
"We really appreciate that," Host said. "I love working with everybody here.".
