Detroit Lakes receives high marks for 2022 financial audit

Detroit Lakes, Minn. (KDLM) – Detroit Lakes received a clean and unmodified audit opinion from BerganKDV after passing their 2022 financial audit with flying colors.

Andy Grice, a certified public accountant for the group, said the clean and unmodified opinion was the highest level of compliance any auditor can give.

2022 Detroit Lakes Financial Audit by Michael Achterling on Scribd

“Our role as your auditor is to provide assurance on the city’s financial statements and that the financial statements (the council) is looking at tonight are fairly stated in all material respects,” said Grice. “We do that through our audit opinion. And we are issuing a clean audit opinion or unmodified opinion and that’s the best we can give as your auditor.”

Grice also said the only thing flagged by the audit was a, quote, “lack of segregation” in Detroit Lakes’ accounting practices. However, Grice said, that isn’t uncommon for small towns like Detroit Lakes.

“We are required to report any material weaknesses or significant deficiencies in internal control as part of our audit procedures and we had one finding related to a lack of segregation or accounting duties,” he said. “That finding is not uncommon for a city of your size, but it is something for city council to remain aware of.”

He also said the audit looked at the city’s compliance with three federal programs, which included: Drinking water revolving funds, American Rescue Plan Act funds and the Federal Highway Grant. A clean and unmodified opinion was given for the city’s accounting for each of the three federal programs.

According to the audit report of the city’s main funds, Detroit Lakes’ general fund increased about $400,000 from 2021 to 2022 with a total balance of $6.9 million.

The city’s electric fund increased its net position from $20 million to $21.2 million over the last year.

The Detroit Lakes water fund increased its net position from $1.4 million to $2.5 million and the wastewater fund also increased from $9.8 million to $11.6 million over the past year.

The city liquor fund increased about $250,000 from 2021 to 2022 with a total unrestricted net position of $4.3 million, but a large portion of the city’s liquor fund is expected to be used to pay for a portion of the city hall remodel project currently underway.

In 2022, the Detroit Lakes liquor fund reported $2.4 million in gross profits, slightly up from $2.3 million in 2021.