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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 Hopewell – Fund Balance and Budget Monitoring (2013M-231)


Released: January 10, 2014 -- [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, 2010 through September 30, 2013.

Background

The Town of Hopewell is located in Ontario County. The Town is governed by the Town Board, which comprises four elected members and an elected Town Supervisor. The Town’s main operating funds include the general fund, highway fund and water fund. For the 2012 fiscal year, expenditures from those funds totaled over $2.2 million.

Key Findings

  • The Board did not adopt a policy or develop procedures to govern the level of fund balance to be maintained.
  • The Board did not develop accurate budget estimates or a formal, comprehensive multiyear financial and capital plan to adequately address the Town’s long-term operational and capital needs.
  • The water fund has retained excessive amounts of unexpended surplus fund balance. Unexpended surplus funds were consistently more than the actual expenditures in each of the fiscal years 2008 through 2012.
  • The highway fund reported deficit unexpended fund balances of approximately $61,000 in 2011 and $10,000 in 2012. Because the Board considered that the tax levies were no longer sustainable without significant budget cuts, it enacted a local law in 2012 to override the 2 percent property tax increase limit under the new tax cap law, thereby allowing the Town’s 2013 budget to exceed the tax cap by $25,403, or approximately 5 percent.

Key Recommendations

  • Adopt a policy and develop procedures to ensure that the amounts of estimated expenditures and unexpended surplus funds are reasonable.
  • Adopt balanced budgets with realistic estimates of anticipated revenues, expenditures and fund balance available for appropriation. Develop long-term financial and capital plans that project operating and capital needs and financing sources for a three-to five-year period.
  • Use the unexpended surplus fund balance in the water district fund in a manner that benefits district taxpayers.
  • The Board should review budget-to-actual reports on a monthly basis and use them to monitor current-year results against budget estimates.

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