Town of Harrison - Budgeting Practices (2018M-142)

Issued Date
February 22, 2019

[read complete report - pdf]

Audit Objective

Determine whether the revenue and expenditure projections in the budget and fund balance were reasonable.

Key Findings

  • From 2013 through 2017, the Board underestimated revenues in its budgets by a total of $15.4 million, or an average of $3.08 million (8 percent) per year, which created excessive unassigned fund balance.
  • Unassigned fund balance ranged between 17 and 40 percent of ensuing years’ appropriations.

In addition, sensitive information technology (IT) control weaknesses were communicated confidentially to Town officials.

Key Recommendations

  • Adopt realistic budgets using results from prior years to project revenues.
  • Maintain unassigned fund balance within a reasonable amount.
  • Develop a plan to use excess fund balance to benefit taxpayers.

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.