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NYS Comptroller


Audits of Local Governments and School Districts

City of Lockport – Fiscal Stress (2013M-330)

Released: December 20, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the City’s financial condition for the period January 1, 2012 through October 9, 2013.


The City of Lockport is located in Niagara County, is approximately 8.4 square miles and serves approximately 21,165 residents. The elected Common Council is the legislative body responsible for managing City operations. The City’s budgeted appropriations for the 2013 fiscal year are approximately $32 million.

Key Findings

  • We estimate that the City will realize operating deficits in the general fund ($1.5 million), water fund ($275,000), sewer fund ($370,000) and refuse fund ($212,000) for the fiscal year ending December 31, 2013, totaling $2,357,000. These operating deficits occurred because City officials did not include realistic estimates in the 2013 adopted budget.
  • The City’s December 31, 2012 financial position was misstated in its financial statements, which provided City officials with an inaccurate representation of the City’s financial condition. This inaccurate reporting likely contributed to the continuing cash flow problems the City experienced in its 2012 and 2013 fiscal years. We found that asset accounts reported as of December 31, 2012 were unsupported and overstated, and liabilities were underreported. Our analysis indicated that the City should have reported fund balance deficits in the general, water and refuse funds as of December 31, 2012. Further, these deficits will be substantially greater as of December 31, 2013, as a result of the operating deficits we forecast for the 2013 fiscal year.

Key Recommendations

  • Adopt structurally balanced budgets that include realistic estimates of revenues and expenditures. Monitor actual revenues and expenditures against budgeted amounts and amend the budget, as necessary, when significant variances become known.
  • Develop and implement a plan to eliminate the fund deficits. Correct the accounting records and remove any unsupported balances to ensure that reports provided to the Council members and other City officials provide a realistic representation of the City’s financial condition.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email:
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236