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Office of the State Comptroller - Local Government & School Accountability
Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Franklin County – Fiscal Stress (2013M-252)


Released: October 4, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the County’s financial condition for the period January 1, 2009, to June 30, 2013.

Background

Franklin County is located in northeastern New York State and has a population of approximately 51,600. The County is governed by the County Legislature which is composed of seven members, one of whom also serves as the Chairman. The County’s budgeted appropriations for the 2013 fiscal year are approximately $100.5 million.

Key Findings

  • The Legislature adopted budgets for the general fund that were not structurally balanced, instead the Legislature routinely relied on appropriating significant amounts of fund balance and reserves to finance operations.
  • The County’s enterprise infirmary fund was not self-sufficient, and therefore required subsidies from the general fund through both interfund transfers and advances.
  • The Legislature also had not adopted a policy establishing a reasonable level of unexpended surplus funds to maintain and had not developed and adopted comprehensive, multiyear financial and capital plans. As a result, the general fund realized annual operating deficits, a declining fund balance, and a declining cash balance over the last four fiscal years (2009 to 2012). The County’s financial condition declined further during 2013 to a position that the County did not have sufficient cash to pay its bills and other obligations when due, resulting in the County issuing short-term debt in the form of a tax anticipation note for $4 million on May 31, 2013.

Key Recommendations

  • Adopt budgets for the general fund that include realistic estimates for revenues and expenditures and that are structurally balanced.
  • Authorize all interfund advances and develop a plan to ensure that all outstanding interfund advances are repaid by the close of the fiscal year.
  • Develop and adopt a fund balance policy that establishes a reasonable amount of unexpended surplus funds to be maintained in order to meet the County’s needs, provide sufficient cash flow, and avoid reliance on short-term borrowing.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236