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Audit Objective

Determine whether the Town of Hempstead Local Development Corporation’s (THLDC) Board of Directors (Board) effectively managed fund balance.

Key Findings

The Board did not effectively manage fund balance.

• The Board did not develop or adopt a fund balance policy that addresses what level of fund balance is needed or how any surplus funds will be used and the timeframe for doing so.
• The unrestricted fund balance grew to $2.4 million as of December 31, 2020.
• Allowing $2.4 million to accumulate and sit idle without a specific purpose to benefit the Town is not in the public’s best interest.

Key Recommendations

• Develop and adopt a comprehensive written fund balance policy and a plan to use surplus funds.

THLDC officials disagreed with certain aspects of our findings and recommendations but indicated they have initiated corrective action. Appendix B includes our comments on issues raised in the THLDC’s response letter.