The Steele County Commissioners are seen here the Baker Tilly presentation on Tuesday in Owatonna.
What was supposed to be a loss ended up a multimillion-dollar windfall for Steele County.
Tuesday, Baker Tilly Principal Certified Public Accountant Sheanne Hediger presented a summary of findings regarding its third-party 2025 Steele County financial audit. He said Steele County’s 2025 investments generated $4.39 million, far exceeding the projected $836,000 deficit and bolstering the county’s fund balance to its healthiest level in years.
For 2025, Hediger said that Baker Tilly issued what they call an “unmodified” or “clean” opinion, which is the highest level that the county can receive. Receiving a clean opinion means that the firm found the financial statements to be fairly presented in all material aspects.
Portions of the audit summary focused on the manner in which the information was reported but the primary items of note were outlined in Hediger’s summary of the current general fund and fund balance. Hediger classified these balances as the most important metrics within the county’s financial statements as they can aid in assessing the health of the county overall. Having a strong fund balance allows for adequate cash flows to offset timing of what revenues come in. It also allows flexibility to respond to unplanned needs or budget needs.
Subcategories within the general fund were presented in order of liquidity and restriction with the first being the least liquid and the last being the least restrictive. Those subcategories and the funds present or allocated to them are roughly:
• $620,000 in non-spendable funds — made up mostly of inventories and prepaid expenses, advances to other funds, and then long-term loan receivables.
• $1.5 million in restricted funds — restricted for its its use by external groups, creditors, grantors, laws, or regulations.
• $1.5 million in committed funds — the board previously set these funds aside for specific purposes through resolutions for capital projects and board employee wellness programs.
• $1.5 million in assigned funds — also set aside for specific purposes but not as restrictive as a formal resolution and would go toward future compensated absences and retiree payments.
• $30 million in unassigned funds — residual left to be used for operations.
• $34 million is the total fund balance — which represents a $4.3 million increase over previous years.
Hediger placed Steele County’s general fund expenditures for 2026 at about $36.5 million and compared to the available fund balances amount of $31.5 million which she said leaves the county with 86% of its expenditures for the year on hand. That means that if Steele County were not to receive revenue in 2026, they could essentially operate for about 10 months.
County policy is to have 45% to 55% of the subsequent year’s budgeted expenditure available in their fund balance. So, at over 80%, they are above what their policy requires.
Hediger said that the $4.3 million increase for the year came from two primary sources, the first being the county’s investment revenues. The second contributor was miscellaneous income of about $1.2 million and includes funds from projects such as MnPrairie, which returned $500,000.
No further questions were asked by the commissioners following the Baker Tilly presentation. The commissioners voted unanimously to accept the findings of the 2025 Steele County audit report, financial statements and supplementary information.
Reach reporter Tim Messenger at 507-444-2376. © Copyright 2026 Adams MultiMedia of Southern Minnesota. All rights reserved.
