Audits of Local Governments and School Districts
Village of Herkimer – Financial Management (2012M-36)
Released: May 4, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to review the Village's financial management for the period June 1, 2010, through December 31, 2011.
The Village of Herkimer is located in the Town of Herkimer in Herkimer County. The Village is governed by a Board of Trustees which comprises four elected Trustees and an elected Mayor. Operating expenditures in the general fund were approximately $6 million for the fiscal year ended May 31, 2011.
- The Board has not established a multi-year financial plan to address the Village's finances. The Board adopted budgets for the last three fiscal years that appropriated unexpended surplus funds to cover planned operating deficits. As a result, the general fund balance has declined over that period by $355,763. While the Village still has a significant amount of fund balance remaining, eventually Village officials will have to replace it as a funding source in the Village budget.
- The use of a transfer of approximately $175,000 from the capital reserve for funding the 2011-12 budget may ultimately compromise the Village's financial stability.
- The Village is nearing its constitutional tax limit and therefore, will be limited in its ability to increase real property taxes to finance operations.
- Create and routinely update a multi-year financial plan to provide a framework for preparing future budgets and managing the Village's financial operations.
- Before budgeting a transfer from the capital reserve as a revenue in the general fund budget, identify specific capital projects or purchases included in the budget that meet the purpose for which the reserve fund was established.
- Regularly monitor the constitutional tax limit and ensure that budgeted tax levies are within those limits.
Local Government and School Accountability Contact Information:
Phone: (518) 474-4037; Email: email@example.com
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236