Purpose of Audit

The purpose of our audit was to determine whether the Council adopted realistic budgets that were structurally balanced, routinely monitored financial operations and took appropriate action to maintain the City’s fiscal stability for the period January 1, 2014 through June 30, 2017.

Background

The City of Watervliet is located in Albany County and has a population of approximately 10,250. The City is governed by an elected three-member City Council. Budgeted appropriations for the general fund, water fund and sewer fund for 2017 totaled approximately $16 million.

Key Findings

• The Council adopted general fund budgets that were not structurally balanced because of continued reliance on fund balance.
• The City experienced operating deficits and declining fund and cash balances in all three operating funds from fiscal years 2014 through 2016.
• The Council did not receive budget-to-actual reports on a regular basis, and accounting records did not agree with annual financial reports.

Key Recommendations

• The Council and officials should develop and adopt structurally balanced general fund budgets.
• The Council should ensure that the Director maintains accurate and timely financial records.
• The Director should provide the Council with quarterly budget status reports and cash flow projections for each fund, and the Council should use these reports to monitor the City’s financial operations and prevent a further decline in the City’s financial condition.