Menahga's 2009 audit shows a healthy fund balance, increased assets
Menahga has received the 2009 audit report, showing a healthy fund balance.
The Menahga City Council received the 2009 audit report from Eide Bailly at its Monday meeting.
The audit opinion was "clean," meaning an unqualified opinion. The financial statements were prepared using accounting principles generally accepted in the United States of America, do not contain material misstatements and are fairly presented.
Brian Stavenger presented the audit to the council, along with Justine Ostlie.
A summary of the audit showed total assets for the city increased by 10.1 percent in 2009 for a total of $8,270,152. Liabilities and net assets also increased, a total of 27.9 percent to $3,105,674.
Stavenger said the increase in assets was due to the water and sewer project on County State Aid Highway 21. Liabilities increased due to bonds issued for the water and sewer project.
The city's revenues in 2009 increased by 10.4 percent to $800,092. The city's expenditures increased by 21.9 percent to $859,586 in the same year.
"The revenues were up, mostly because of property taxes and state aid increased," Stavenger said.
The large increase in expenditures was due to the council deciding to pay off the fire truck early, he said. There was also additional crack sealing and police and fire equipment purchased in 2009.
The fund balance at the end of the year was $568,093. The unreserved fund balance represented 64.6 percent of operating revenues, which exceeds recommendations by the Minnesota Office of the State Auditor. The OSA recommends local governments maintain an unreserved fund balance of between 35 and 50 percent of operating revenues, or no less than five months of operating expenditures.
The water and sewer fund showed an overall income of $18,767 for 2009 and a low percentage of unaccounted water usage at 6.1 percent.
"High values for unaccounted-for water can be a symptom of illegal connections, incomplete or inaccurate metering, or leakage," the audit report stated. Systems will values below 15 percent are considered to be in good condition. Menahga falls well below this percentage.
The municipal liquor fund showed a net income of $55,941 in 2009 before $45,000 was transferred out. The end of year balance for 2009 was $366,124.
The gross profit percentage for the liquor store was 42.4 percent, above the state-wide average of 37.6 percent, according to the audit report.