Purpose of Audit

The purpose of our audit was to review the City’s financial condition for the period January 1, 2013 through March 18, 2014.

Background

The City of New Rochelle is located in Westchester County and has approximately 77,000 residents. The City Council is the legislative body responsible for establishing policies and the City Manager is responsible for administering the City’s daily operations. The City’s budgeted appropriations for the 2014 fiscal year are approximately $118 million.

Key Findings

• The City currently has a stable financial condition. The City’s general fund unassigned fund balance has increased from $1.6 million to $6.1 million from fiscal years 2011 through 2013. The City’s capital projects fund and internal service fund-workers’ compensation (workers’ compensation fund) had deficits for each of the last three years.
• City officials do not report cash assets in each fund’s cash account. All cash is deposited in a concentration account and recorded as an asset in the general fund. Instead of cash assets, the other City funds include amounts "due from other funds," while the general fund includes a significant "due to other funds." As a result, the City’s financial statements are not as informative as they could be.

Key Recommendations

• Continue to monitor the capital projects and workers’ compensation funds to ensure that the deficits in these funds are eliminated.
• Establish and use cash account codes to record revenue deposits and disbursements for each fund.