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September 2, 2010

DiNapoli: Town of Wheatfield Has a
Bigger Deficit Than Reported

Town Inappropriately Used Grant Funds for General Town Purposes

The Town of Wheatfield mismanaged its finances and accumulated a large deficit, according to a report released today by New York State Comptroller Thomas P. DiNapoli. In addition, at the same time the town was accumulating deficits, it was also providing cell phone service to non-employees.

"It's the town board's responsibility to manage finances in a way that's good for the town and good for its taxpayers," said DiNapoli. "Unfortunately, the board has not done this and now has large deficits. At the end of the day, the town will have to make up for this loss." The audit covered the period January 1, 2008 to November 16, 2009.

The town reported an accumulated combined deficit of $679,000 on December 31, 2009 in its general, highway and fire protection district funds. However, DiNapoli's auditors found that the town's deficit was $2 million larger than the town had reported. The town had received a $2 million grant from the Environmental Protection Agency for sewer construction costs but instead used the money for general town purposes because of ongoing cash shortages. Since the grant funds were for particular purposes, they must be repaid and will therefore increase the town's deficit.

In addition, the town purchased unnecessary cell phones, paid for cell phone services for non-town employees and did not have a contract on file to define the rights and responsibilities of the town and the vendor providing the wireless service. As a result, the town may have to pay $3,554 in disputed charges.

DiNapoli recommended that the town board:

  • Budget to eliminate the fund balance deficits in the general, highway and fire protection district funds;
  • Monitor expected revenues and expenditures to ensure they are in line with budget estimates;
  • Stop the practice of providing cell phones to non-employees; and
  • Recover from non-employees all amounts paid for cell phones that have not already been reimbursed.

Town officials generally agreed with DiNapoli's recommendations, and indicated they will take corrective action.

View a copy of the report.


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