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Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Bath – Financial Management (2012M-14)


Released: May 18, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Town's financial management and budgeting practices, and its resultant financial condition for the period January 1, 2009 to December 30, 2011.

Background

The Town of Bath is located in Steuben County and has a population of approximately 12,000. The Town is governed by an elected five-member Town Board comprising the Supervisor and four council members. The Town's budgeted appropriations for the 2011 fiscal year were approximately $3.2 million.

Key Findings

  • The Board did not adopt detailed policies and procedures for its budget preparation process and the routine monitoring of the budget against actual operating results during the year. The Board adopted budgets with inaccurate estimates of revenues and expenditures, and used fund balance as a revenue source with no systematic approach to ensure that appropriated amounts were both needed and available.
  • Because of the Board's consistently poor budgeting practices, three operating funds experienced significant declines in fund balance from the 2007 to the 2011 fiscal years. These operating funds therefore had little or no financial flexibility to handle unexpected occurrences, particularly the town-outside-village highway fund, which at the end of the 2011 fiscal year had a fund balance deficit of $75,685 and a budgetary deficit of $175,685 after the appropriation of non-existent fund balance in the 2012 budget.

Key Recommendations

  • Establish a policy and develop procedures for preparing realistic and structurally balanced budgets, using actual financial results from prior years and other relevant and available data.
  • Develop a formal plan to alleviate the fund balance deficit in the town-outside-village highway fund.

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