New York State Comptroller Thomas P. DiNapoli today announced the following local government audits were issued.
Auditors conducted reviews of 20 adopted budgets of various counties, cities, towns and villages across the state to assess whether local officials adequately considered the impact of the pandemic on their financial operations while developing their 2021 fiscal year budgets. Below are the findings of some of the communities reviewed:
Auditors found that officials for the Town of Bolton adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget. Due to uncertainties in available state funding for highway improvements that were planned to be made in 2020, officials delayed highway improvements from 2020 to 2021. The delays carried over their 2020 revenue estimate for state funding to 2021.
Auditors found that officials for the Town of Elma adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.
Auditors found that Essex County officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.
Auditors found that officials for the City of Jamestown adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.
Auditors found that officials for the Town of Niskayuna adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget. However, officials balanced the 2021 adopted budget by including negative appropriations totaling $663,254. Those funds were identified as “2021 budget challenge” across departments in the general fund, highway fund, water district and two sewer districts. When adopting the budget, officials did not identify the specific appropriations in each department from which these budgeted cost savings would be realized nor did they develop a cost savings plan. This is not an appropriate budgeting method. As a result, the board adopted an out of balance budget.
Other audits released:
Auditors found that certain significant revenue and expenditure projections in the 2021-22 proposed budget are not reasonable and identified other matters that require city officials’ attention. The proposed general fund budget includes estimated revenues of $975,000 for federal aid anticipated to be received by the city through the Federal American Rescue Plan Act of 2021. The timing of the receipt of funds from the Act is uncertain at the time. Once received, the funds will come with restrictions on what they can be used for. The proposed budgets for the general and recreation funds are not structurally balanced because they include subsidies from other funds to finance their operations.
The city's financial condition remains in significant fiscal stress. The proposed general fund budget of $93.6 million is structurally imbalanced because the city continues to issue debt to finance recurring operating expenditures. The continued reliance on proceeds of long-term debt to finance recurring operating expenditures will further diminish the city's ability to finance needed services in future budgets. The city's proposed budget includes a tax levy of $50.5 million, which is $3 million above the legal limit, unless the city council overrides the tax levy limit. The proposed budget also includes a 4 percent water rate increase. However, at the time of the review, the city council had not authorized the rate increase. Based on the city's historical overtime cost trends, the city's overtime appropriation appears insufficient. City officials did not include cash flow projections in the proposed budget. Although not required, cash flow projections would provide officials with another gauge of the effectiveness of the proposed budget. City officials developed a "budget timeline," but they never confirmed an actual budget adoption date.
The current supervisor did not maintain complete, accurate and timely accounting records and reports. As a result, the board was not provided with the necessary financial reports and information to properly oversee town finances. During the audit period, the current supervisor did not prepare bank reconciliations, record receipts in the financial accounting software, or provide the board with detailed monthly budget-to-actual reports. In addition, the annual financial reports required by the State Comptroller’s Office were not filed. The board did not annually audit or provide for an audit of the supervisor’s records and reports, as required.
The town board did not ensure credit card purchases were adequately supported, for legitimate purposes or approved before payment. Credit card statements were mailed to the prior supervisor and not provided to the board. They were also not always reconciled with supporting documentation before approval. The board approved payment of 116 credit card purchases totaling $18,014 without adequate supporting documentation. Auditors were unable to determine the appropriateness of an online shopping membership totaling $420 and they were unable to locate a ladder purchased for $585. Credit card reward points worth at least $1,250 were redeemed during the audit period. Auditors were unable to determine whether these points were redeemed to benefit the town.
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