Purpose of Audit

The purpose of our audit was to review the City’s financial condition for the period January 1, 2012, to May 31, 2013.

Background

The City of Fulton is located in Oswego County. The Common Council is the legislative body responsible for managing City operations. The City’s budgeted appropriations for the 2013 fiscal year were approximately $15.5 million.

Key Findings

• We reviewed budget-to-actual results for the fiscal years 2010 through 2012 and found that the Council adopted realistic budgets. The Chamberlain monitored the budget with actual results, and City officials made budget transfers as needed throughout the year. In addition, City officials have prepared multiyear financial plans.
• However, the Council has adopted budgets that have routinely relied on the appropriation of fund balance as a financing source, causing the City to incur planned operating deficits in the general fund. This has led to a significant reduction in the City’s unexpended surplus funds from 2010 to 2012. During that period, the unexpended surplus funds remaining at year end declined 84 percent − from $841,747 in 2010 to $136,068 at the end of 2012 − leaving the City with little cushion for managing unforeseen events.

Key Recommendations

• Adopt a policy setting forth the reasonable amounts of unexpended surplus funds that the City should maintain.
• Reduce reliance on fund balance as a financing source and continue to evaluate and explore ways to cut costs and/or increase revenues.