EDWARDS -- The Town of Edwards has been ordered to create a corrective action plan after state auditors accused the town of padding fund balances and using the money to balance over expenditures in various funds.
"The board has not adopted realistic budgets, has not adequately monitored the town’s financial operations and has not taken timely action to maintain the town’s financial stability," the audit said.
The audit said fund balances in the town-wide general fund, the town-wide highway fund and the town-outside-village fund fluctuated significantly in the last four year.
According to the audit the board allowed the budget to be overspent and used the excess fund balance to make up the difference.
"For 2011, the town over-expended approximately $250,000 in individual accounts in its major funds," the report said.
The audit showed the town failed to approve fund transfers and questioned its current system of record keeping.
"During our audit period, town officials did not have a formal long-term capital or operational plan. Town officials told us that they do discuss long-term planning. Since the town took over the former Village’s water and sewer operations in December 2012, it’s even more imperative that the board develops long-range plans. Without multiyear operational and capital plans, the town is not sufficiently prepared to ensure fiscal stability in the long term,"
The following recommendations were issued in the report:
• The board should develop a fund balance policy that establishes a reasonable amount of fund balance that should be maintained in order to meet the town’s needs.
• The supervisor and board should develop and adopt budgets that include realistic estimates for revenues, expenditures and fund balance available for appropriation.
• The supervisor should provide periodic budget status reports to the board.
• The board should monitor actual results of town operations against budget estimates throughout the fiscal year and ensure that appropriations are available before funds are expended. The supervisor should not permit any fund or appropriation account to be overdrawn at any time.
• The board should develop long-term financial and capital plans that project operating and capital needs and financing sources for a three-to five-year period. These plans should be monitored and updated on an ongoing basis.
"The Board has the responsibility to initiate corrective action. A written corrective action plan that addresses the findings and recommendations in this report should be prepared and forwarded to our office within 90 days, pursuant to Section 35 of the General Municipal Law."