Purpose
The purpose of our budget review was to provide an independent evaluation of the Town’s adopted budget for the 2021 fiscal year.
Background
The COVID-19 pandemic (pandemic) has had various levels of impact on the financial operations of local governments across New York State. Some local governments have seen little to no impact on their financial operations, while others have seen more significant impacts due to reductions and/or increases to their revenues and/or expenditures. This has led to some local governments having to reduce or eliminate some services and temporarily or permanently reduce staff positions. In addition, some local officials have decided to delay capital projects, which could result in future delays to other projects to maintain and improve local government infrastructures.
The pandemic has also created a difficult environment for officials to develop annual budgets given the unknowns of future financial impacts. The pandemic increases the need for local officials to more closely monitor their budgeted estimates for revenues and expenditures against actual results, and modify their budgetary estimates accordingly, when warranted, during the course of their fiscal year.
To assess whether local officials adequately considered the impact of the pandemic on their financial operations while developing their 2021 fiscal year budgets, our office conducted reviews of 20 adopted budgets of various counties, cities, towns and villages across the State. The Town of Niskayuna (Town) is one of the local governments included in our review. The Town is located in Schenectady County.
Key Findings
- Our review found that officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues in the 2021 adopted budget.
- Officials balanced the 2021 adopted budget by including negative appropriations totaling $663,254, identified as "2021 budget challenge," across departments in the general fund, highway fund, water district and two sewer districts. When adopting the budget, officials did not identify the specific appropriations in each department from which these budgeted cost savings would be realized nor developed a cost savings plan. This is not an appropriate budgeting method. As a result, the Board actually adopted an out of balance budget.
Key Recommendations
- Develop and implement cost saving measures to balance the budget and be prepared to amend the budget in the event the cost savings are not implemented for each department or if they are not fully realized.
- Carefully monitor revenues and expenditures throughout the year and closely monitor ongoing discussions and legislative acts at both the State and Federal level that could be beneficial or detrimental to the Town’s financial operations. Officials should use this information to make adjustments to the budget as needed throughout the year.