Maybrook audit issued

Comptroller: board did not adequately manage the village’s financial condition

By Connor Linskey
Posted 7/15/20

Last Wednesday, New York State Comptroller Thomas P. DiNapoli announced that the Maybrook Village Board did not adequately manage the village’s financial condition during the audit period of …

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Maybrook audit issued

Comptroller: board did not adequately manage the village’s financial condition

Posted

Last Wednesday, New York State Comptroller Thomas P. DiNapoli announced that the Maybrook Village Board did not adequately manage the village’s financial condition during the audit period of June 1, 2014 through Dec. 31, 2019.

Auditors determined the board used unrealistic revenue estimates during the budget process. The village’s overall fund balance decreased by $642,000 (63 percent) from fiscal year 2014-2015 to 2018-2019. The general fund had operating deficits in the 2014-15 through 2018-19 fiscal years, the sewer fund had operating deficits in the 2014-15 through 2016-17 fiscal years and in 2018-19, while the water fund had an operating deficit in 2018-19.

Auditors also found that village officials did not develop a fund balance policy, multi-year financial plan or capital plan.

The Office of the New York State Comptroller noted that the village should have a multi-year plan because it is a vital tool for local governments, especially those struggling with difficult financial conditions. It enables officials to identify developing revenue and expenditure trends, establish long-term priorities and goals and consider the impact that one-time financing sources and or other short-term budgeting decisions may have on future fiscal years.

Multi-year plans should include revenue and expenditure projections, reserve and fund balance plans and a fiscal improvement plan. Officials must monitor and update multi-year plans on a continuing basis to provide a reliable framework for preparing budgets and ensure that decisions are guided by the most current and accurate information available.

A capital plan is designed to help officials maintain and improve a village’s capital assets over time. It should include a list of all major public assets that have a significant useful life, address legal and policy requirements such as clean water or economic development, establish parameters for how capital assets will be financed and address how to respond to ongoing maintenance, new needs and emergencies.

Key recommendations from the audit are to develop reasonable revenue estimates and monitor and adjust budgeted revenues when warranted. Auditors also recommend that Maybrook should have adequate fund balance available before appropriating it to finance operations. They also advocate for Maybrook to develop and adopt a fund balance policy, multi-year financial plan and a capital plan.

In response to the audit, Maybrook Mayor Dennis Leahy wrote a letter to Chief Examiner of the New York State Comptroller’s Newburgh Regional Office Lisa Reynolds.

“In closing, the Village of Maybrook Board of Trustees have taken significant steps to correct the village’s fund balance level in the 2019-20 and 2020-21 budgets, including both revenue raising initiatives and non-utilization of fund balance monies to supplement the budgets,” he said. “The Village will continue on this path by more closely monitoring our progress going forward on water and sewer issues while implementing moderate budget increases to reach our goal.”

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