February 22, 2011
DiNapoli: Irondequoit Officials Need to Improve Town's Fiscal Condition
The Town of Irondequoit's fiscal condition declined precipitously over a three year period, limiting town officials' ability to manage emergencies and other unanticipated spending needs, according to an audit released today by New York State Comptroller Thomas P. DiNapoli.
"For two years, Irondequoit officials failed to keep general fund spending within the adopted budget," DiNapoli said. "That just doesn't work. The town needs to enact a reasonable budget, and then live within that budget. For the sake of financial stability, Irondequoit officials need to do a better job managing the town's finances."
DiNapoli's auditors found the town's unreserved fund balance decreased from $1.5 million in the 2006 fiscal year to $297,000 in 2009, well below the town's official policy requirement. The $297,000 amounted to just 2 percent of expenditures.
In October 2008, following recommendations from the Government Finance Officers Association and the town's external auditor, the town board adopted a policy to maintain an unreserved fund balance ranging between a minimum of 5 percent and a maximum of 20 percent of the annual operating budget of each operating fund.
Due to the reduced fund balance and over spending, the town had to increase cash advances from other funds to pay general fund expenditures. The town's reported interfund loan balances increased by nearly $2.5 million from December 31, 2006 to December 31, 2009.
As a result of the board's lack of adequate planning to fund projects and buy equipment, the drainage fund had operating deficits of $214,000 and $94,000, respectively, in fiscal years 2008 and 2009, and its unreserved fund balance declined from $81,666 to a deficit of $199,376. This deficit equaled about 25 percent of the fund's 2009 expenditures.
Town officials generally agreed with DiNapoli's recommendations and said they have already started taking corrective actions. For a copy of the complete audit, including the town's response, Visit here.