Township reserves are more than enough

Thomson Township passed its 2023 audit with flying colors, with one major suggestion - the township should probably have less money in its reserve fund.

Auditors from Abdo, an accounting and consulting firm based in Edina, Minnesota, told township supervisors the general recommendation is to keep a minimum of 35- to 50 percent of the operating budget in the general fund reserves, to cover any unexpected costs or payment delays.

"You guys are well above that. You have almost 200 percent of your operating costs this year within your reserves," said CPA Bonnie Schwieger. "You'd essentially be able to cover your operating budget two times over."

According to the audit summary, the general fund balance was $1,186,834 in December 2023, with a $713,927 general fund budget for the year.

Schwieger did not recommend cutting taxes. Rather, she suggested the township create funds outside the general fund, setting money aside for future projects in a capital reserve fund, for example.

"Right now you're really using your general fund as a catchall where you have all your savings for future capital and the operation portion. Separating them out will paint a clearer picture of where you're at as far as building capital reserves," she said.

"It's a good problem to have," Schwieger added.

As happens with most smaller municipalities and school districts, the audit also noted a limited segregation of duties could increase the chance of errors in accounting, because of the limited number of staff.

Auditors also found that the township was out of legal compliance with state statute requiring township publish financial statements annually in the legal newspaper. That rule applies to townships with more than 2,500 residents or annual revenue greater than $670,500. Auditors recommended this be implemented for 2024.

Township supervisors voted unanimously to accept the audit results.

New clerk needed

The imminent departure of Thomson Township clerk-treasurer Deb Kamunen was also a point of discussion with Abdo, which presented a proposal to handle the township's cash investment monitoring immediately, including reconciling all cash and investments on a monthly basis, as well as payroll. Abdo said they would bill hourly, and estimated monthly costs for those services at about $4,200 a month.

When the township hires a new clerk, Abdo could help them transition.

"If you can get a candidate here that might not have all of the background they need, pick and choose what strengths they have and fill in Abdo," said Kamunen, who is working part-time for the township currently.

"I think it would be money well-spent," she added later, adding that she felt the township could use more oversight of the clerk position.

The board voted to allow chair Ruth Janke to craft an agreement with Abdo.

The clerk-treasurer position was expected to be advertised starting this week.