Purpose of Audit

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s tentative budget for the 2013-14 fiscal year are reasonable.

Background

The City of Olean, located in Cattaraugus County, issued debt totaling $4,300,000 to liquidate the accumulated deficit in the City’s general, water and sewer funds as of May 31, 2007. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their tentative budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

• Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable.
• The City has made good progress in improving its financial condition and implemented or resolved recommendations contained in our budget review report letter issued in March 2012.
• The City’s proposed budget complies with the property tax levy limit set by statute.

Key Recommendations

• Ensure that the potential water and sewer rate increases be authorized by the Common Council prior to the adoption of the budget.
• Ensure that appropriations be included in the respective equipment line items for each department in the general fund budget, rather than transferring the funds to the capital projects account.