Having a robust fund balance is generally considered a good thing for municipalities.
Extra funds carrying over from one budget year to the next can offset future or unanticipated costs. And that pot of money can help insulate taxpayers from bearing the brunt of an unexpected dip in revenues or an emergency big-ticket expenditure.
But in Duanesburg, this pool of unspent money is a little too robust for the liking of state auditors.
The state Comptroller’s Office recently released a study that found town officials consistently over-budgeted expenditures and underestimated revenues, thereby allowing an operating surplus of nearly $1 million for five years ending in 2010.
“The Board and town officials did not employ long-term financial planning, which would have helped them identify the pattern of significant budget variances, take steps to balance the budget, and bring the town’s fund balance down to reasonable levels,” states the audit, which reviewed Duanesburg’s finances over a 15-month period ending in March 2011.
Supervisor Rene Merrihew acknowledged Duanesburg has a fund balance that might seem excessive at first blush. But she said the town also has a number of expensive projects coming in the near future where having a large reserve will be crucial.
For instance, there’s been ongoing discussion about expanding Duanesburg’s diminutive Town Hall. The building’s main meeting room often proves inadequate on days when contentious topics are being discussed.
Town officials are also nearing a proposal to install a new sewer district in the hamlet of Duanesburg at the intersection of Route 20 and Route 7. Merrihew said the fund balance could be used to finance the work, with users in the district repaying with interest.
“The interest goes back into the general fund and goes back to the taxpayers,” she said Wednesday.
Merrihew said the extra pot of money will also come in handy as the town repairs road damage from Tropical Storm Irene late last summer. The town is facing roughly $550,000 in repairs, some of which will eventually be reimbursed by the Federal Emergency Management Agency.
The town also is facing a $349,000 culvert repair project that won’t be reimbursed by FEMA. Merrihew said having a large fund balance allows the town to move forward on these projects without having to worry about the impact on taxpayers.
“I’d rather be dealing with a surplus than a deficit,” she said.
Merrihew said the Town Board does intend to create capital project reserve fund with a designated purpose in accordance with the audit’s findings. She acknowledged the town should have created such accounts earlier.
“We’re going to act on it as quick and responsibly as we can,” she said.
In other findings, the audit identified weaknesses in the Town Justice Court’s internal controls over financial operations. In specific, the comptroller found the court lacked documentation of monthly bank reconciliations and that neither of the two justices performed a monthly accountability analysis
“Because of these weaknesses, the justices have limited assurance that all moneys collected are properly recorded and accounted for and court funds are at risk of being misappropriated without detection or correction,” the audit states.
Justice Robert Butler said the court took measures to increase their fiscal accountability in wake of the audit. In a response dated from March, he said the court now conducts monthly reports to ensure the accounts always match the records on file at the bank.
“These new procedures should insure the court’s accountability as to any money issues,” he wrote in the letter.