Village of Hewlett Bay Park – Financial Management (2022M-30)

Issued Date
June 17, 2022

[read complete report - pdf]

Audit Objective

Determine whether the Village of Hewlett Bay Park (Village) Board adopted realistic budgets, and monitored and effectively managed the fund balance.

Key Findings

The Board did not adopt realistic budgets, or monitor and effectively manage fund balance. As a result, more taxes were levied than needed to fund operations. For example, about $6,000 was needed to balance the budget in 2020-21; however, the property tax levy was $209,000. For the four fiscal years reviewed, the Board:

  • Maintained an excessive level of unassigned surplus fund balance in the general fund. Balances ranged between $273,348 and $348,648, or between 45 and 61 percent of the ensuing year’s budget.
  • Underestimated revenues by a total of $420,341 and overestimated expenditures by a total of $608,117.
  • Budgeted for a large operating deficit each year, ranging between $260,003 and $293,105. However, actual deficits for that period ranged between $5,547 and $42,216. This practice contributed to the continued accumulation of surplus fund balance.

Key Recommendations

The Board should:

  • Develop reasonable budgets and maintain a reasonable fund balance level.

Village officials generally agreed with our findings and indicated they have begun to initiate corrective action.