PIERREPONT – A state audit of the Town of Pierrepont’s finances is critical of the board’s reliance on fund balances for operating money and of the board’s lack of a long-term plan of priorities.

The Town Council acknowledged “significant deficiencies in its overall budget process, and that it was entering a period of fiscal stress,” and has “implemented a number of measures to both deal with the current fiscal difficulties, as well as ensure that these difficulties would not be repeated by future budgeting problems,” the town said in its response.

“The board adopted budgets that relied too heavily on appropriated fund balance as a financing source,” a summary of the audit released to the press said. “Furthermore, the board did not require the bookkeeper to submit estimates of year-end fund balance and did not adopt a policy to determine the amount of unrestricted, unappropriated fund balance to maintain. This has led to significant reductions in the town’s fund balances from the beginning of 2011 to the end of 2013. In addition, the board has not developed a multiyear financial and capital plan to address the town’s long-term priorities,” the auditors from the state Comptroller’s Office said.

“The Board must adopt structurally balanced budgets that provide for sufficient recurring revenues to finance recurring expenditures. An important aspect of budget preparation includes a reasonable estimate of the amount of fund balance that will be available at the end of the fiscal year,” the report said.

Specific recommendations from the auditors were:

• adopt a policy setting forth the reasonable amounts of unrestricted, unappropriated fund balance the town should maintain

• review estimates of fund balance at year-end as part of the town’s budget process and appropriate only available fund balance to finance operations in succeeding years’ budgets

• develop a comprehensive multiyear financial and capital plan that projects operating and capital needs and financing sources over a three- to five-year period. This plan should be monitored and updated on an ongoing basis, the report said.

The report noted that while the audit process proceeded, the town began taking steps to improve the town’s standing.

“The town agrees with all facts in the audit, and agrees with all recommendations made as a result of the audit,” town representatives said in the usual response to the auditors.