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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Village of Hamilton – Financial Management and Internal Controls Over Selected Financial Operations (2011M-219)


Released: January 20, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Village's financial management and internal controls over selected financial operations for the period June 1, 2009, to September 30, 2010.

Background

The Village of Hamilton is located within the Towns of Hamilton, Madison, and Eaton in Madison County. The Village is governed by a Board of Trustees which comprises four elected Trustees and an elected Mayor. Operating expenditures for the fiscal year ended May 31, 2010, were approximately $2.7 million in the general fund and $460,000 in the water fund.

Key Findings

  • The Village's budgeting practices in the general and water funds have resulted in the general fund having approximately $1.3 million of unreserved, unappropriated fund balance and the water fund having approximately $703,000.
  • The Board and Village officials consistently overestimated expenditures and underestimated revenues over the last five years, which resulted in annual operating surpluses and increases in fund balance totaling $718,000 in the general fund and $275,000 in the water fund. Despite the surpluses, the Board increased the Village's real property tax levy by approximately $200,000 during the past five years.
  • The Board does not have non-payroll cash disbursement or claims processing policies in place, or written procedures to address these functions.
  • Village officials did not always comply with General Municipal Law when making purchases.

Key Recommendations

  • Use excess fund balance identified in this report in a manner that benefits Village taxpayers.
  • Ensure that budget estimates are reasonable.
  • Establish and adopt comprehensive policies and procedures for cash disbursements and claims auditing.
  • Closely monitor the purchasing process to ensure that purchases are made in accordance with GML.

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