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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Clare – Fiscal Stress (2013M-317)


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

Purpose of Audit

The purpose of our audit was to evaluate the Town’s financial condition for the period January 1, 2012 to April 30, 2013.

Background

The Town of Clare is located in St. Lawrence County and serves about 105 residents. The elected five-member Town Board is the legislative body responsible for managing Town operations. The Town’s general fund budgeted appropriations for 2013 were approximately $136,000 and $173,000 for the highway fund.

Key Findings

  • The Board did not adopt a policy or method to determine the amount of unexpended surplus funds to maintain.
  • The bookkeeper/budget officer did not establish procedures to reasonably estimate the amount of fund balance that will be available at year end. As a result, the Board has heavily relied on appropriated fund balance as a financing source in the annual budgets, and in some years, it appropriated more fund balance than was actually available. For example, when adopting the 2012 and 2013 budgets, the Board appropriated more general fund balance than was actually available resulting in budget deficits, going into the 2012 and 2013 fiscal years. Similarly, when adopting the 2012 budget, the Board appropriated more highway fund balance than was actually available resulting in a budget deficit going into the 2012 fiscal year. This has led to a significant reduction in the Town’s fund balances from the beginning of 2010 to the end of 2012. Fund balance in the general fund declined 79 percent (from $38,912 to $8,331), and the highway fund balance declined 89 percent (from $38,139 to $4,236), during this period.

Key Recommendations

  • Adopt a policy setting forth the reasonable amounts of unexpended surplus funds that the Town should maintain.
  • Develop procedures to reasonably estimate the amount of fund balance that will be available at year end.
  • Appropriate only available fund balance to finance operations in succeeding years’ budgets.
  • If the Board appropriates more fund balance than is available, modify the budget early in the next fiscal year to ensure that the budget is balanced.

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