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February 27, 2008

 

DiNapoli: Improved Town of Colonie Oversight
Could Have Prevented a Multi-million Dollar Deficit

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The Town of Colonie went from a $12.5 million fund balance surplus to a $10.1 million deficit in four years due to ineffective town board oversight, according to an audit released by state Comptroller Thomas P. DiNapoli. The deficit grows to nearly $18 million when the town’s landfill fund is included.

“Local officials have to manage public assets responsibly – in good times and bad,” DiNapoli said. “It’s pretty clear that wasn’t happening under the prior administration in Colonie. This audit provides the new administration and the citizens of Colonie with an accurate assessment of town finances, enabling them to address the challenges that lie ahead.”

The audit also found that the town increasingly relied on landfill fees, revenue anticipation notes and interfund advances and transfers to subsidize general fund operations, causing further fiscal stress.

The audit, which covered the period January 2006 to June 2007, also found that town officials:

  • Improperly appropriated fund balance moneys in the general, highway, library and Maplewood refuse district in excess of what was available;
  • Overestimated revenues in town budgets by approximately $2 million and underestimated expenditures by approximately $8 million during a four year period;
  • In three years, budgeted for a $1 million one-time sale of town land that never materialized;
  • Agreed to pay the Colonie Youth Center $200,000 over and above the $10,400 in monthly payments by the town, despite the town’s worsening financial condition; and
  • Continued to borrow money to cover operational costs and used $6.6 million in sales tax moneys inappropriately.

DiNapoli recommended that town officials:

  • Estimate revenues, expenditures and available fund balances more conservatively in future town budgets and develop a comprehensive plan for resolving the deficit fund balances and cash flow deficiencies;
  • Review state law regarding the use of sales tax revenues and consult with the town attorney to ensure compliance with the statute; and
  • Review all internal fund-to-fund cash advances and eliminate them by the end of the fiscal year.

Town officials generally agreed with the Comptroller’s recommendations and indicated they planned to initiate corrective action.

Click here for a copy of the report.

 

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