Audit Objective
To determine whether the Board and Town officials adopted realistic budgets and effectively managed fund balance and reserves.
To determine whether Town departments were properly collecting, depositing and recording cash receipts.
Key Findings
The Board could improve its budgeting and management of fund balance and reserves. The Board:
- Adopted unrealistic budget estimates, which resulted in operating surpluses, unused appropriated fund balances and increasing fund balances in the general and highway funds.
- Did not adopt a multiyear financial and capital plan or detailed reserve plan that included the need and optimal funding level for each reserve.
Town department procedures for cash receipts were deficient because officials lacked adequate documentation for cash receipts collected by certain departments, recorded receipts using deficient software programs and did not always deposit receipts timely, or thoroughly reconcile them.
Key Recommendations
- Adopt budgets with realistic estimates.
- Establish a written policy governing the reasonable amount of fund balance to maintain and adopt a multiyear financial and capital plan including a formal detailed plan for reserves.
- Require department officials to maintain and reconcile adequate departmental receipt records.
Town officials disagreed with certain aspects of our findings and recommendations but indicated they planned to implement some of our recommendations. Appendix B includes our comments on issues raised in the Town’s response letter.