Purpose of Audit

The purpose of our audit was to review the City’s financial condition and Council oversight for the period January 1, 2011, through July 31, 2012.

Background

The City of Poughkeepsie is located in Dutchess County and has approximately 33,000 residents. The City is governed by an elected Mayor and an eight member elected Common Council. The City’s total budgeted appropriations for the 2011 and 2012 fiscal years were approximately $67.2 million and $69.9 million, respectively.

Key Findings

• From 2007 to 2011, the City’s general fund balance declined by $12.8 million. As of December 31, 2011 the City had a general fund balance deficit of over $11.4 million. This has occurred because the Council adopted budgets that were not based on prior year’s actual results of operations.
• The City’s debt service costs grew by 45 percent for the period and now are 12.9 percent of annual revenue.
• It appears that the Council was not aware of these negative financial trends because the Council did not require that the Commissioner prepare and present detailed and periodic financial reports to the Council.

Key Recommendations

• Take steps to reduce the deficit in the general fund. Require the Mayor to prepare a realistic budget based on prior year’s actual results for the Council to approve and monitor throughout the year.
• Evaluate the City’s debt and develop a comprehensive plan to reduce the outstanding debt.
• Require the Mayor and Commissioner to prepare periodic and timely reports for the Council. Require the Commissioner to provide timely audited financial statements in order to assist in making informed financial decisions.