Auditor gives Mayville an unmodified opinion, flags material adjustments and the 'tag center' deficit

Brian Gwald of CliftonLarsonAllen presented Mayville’s 2025 audited financial statements and an executive summary to the common council, reporting an unmodified opinion on the basic financial statements and several standard management comments.

Gwald told the council the audit produced an "unmodified opinion," meaning the firm believes the financial statements are complete and accurate in accordance with professional standards. He said auditors proposed several adjustments during the process and that two rose to the level of material audit adjustments related to accounts payable/retainage and deferred revenues at year-end.

He reviewed fund balance details for the general fund, saying Mayville ended 2025 with $2,469,000 in general fund reserves, an increase of $28,152 from the previous year. Gwald noted the unassigned portion of the general fund was approximately 25.9% of budgeted expenditures, within the common benchmark range the auditors cited (20–25%).

The auditor also summarized results for special revenue and capital funds, and presented utility results: operating income for the water utility was just under $900,000 for 2025, and the wastewater utility’s operating income was just under $714,000. He said nonoperating items and capital contributions (including roughly $1.33 million in grant funding for sewer work) affected net position.

Gwald called attention to advances between the general fund and the city’s "tag center," reporting about $781,000 had been advanced and recorded; the tag center showed a $353,000 deficit in the audit for 2025. He recommended reviewing and tracking the interfund activity as the city moves forward.

On debt, Gwald showed Mayville’s general obligation debt at roughly $9.2 million by the end of 2025 and noted the statutory debt limit (5% of equalized value) had grown; Mayville used about 30% of its limit. He also flagged standard governance items for the council to consider, including a formal fund balance policy review, segregation of duties given recent turnover, insurance/collateral for cash, and a cyber-risk assessment for IT.

During questions, a council member asked whether internal controls were "more lax than normal." Gwald replied auditors do not give an opinion on internal controls and emphasized that decentralized cash collection points and staff turnover increase risk; he said improvements had been made during 2025 through staff efforts. Asked to grade the city's overall financial condition, he said, "I'd probably give you a B minus," citing a solid general fund and manageable debt but noting the tag center as a lingering concern.

The presentation concluded with the firm offering to help implement adjustments and to work with staff on upcoming accounting and reporting standard changes required in 2026–2027.