Purpose of Audit

The purpose of our audit was to review the Town’s operating budgets and disbursements for the period January 1, 2011, to November 15, 2012.

Background

The Town of Fremont is located in Sullivan County and has approximately 1,400 residents. The Town provides water, highway and general government services to its residents. The Town Board is comprised of four elected members and an elected Supervisor. The Town reported expenditures of $244,200 for the general fund, $850,027 for the highway fund and $10,624 for the water fund for fiscal year 2012.

Key Findings

• The Board did not develop accurate budget estimates for the general fund and did not properly monitor and control actual activity against those estimates. The Board has over-estimated revenues for the years 2008 through 2012 by an aggregate of more than $126,000, which is more than a 12 percent average shortfall. As a result, at the end of 2012 the Town had a fund balance deficit of $3,586. In June 2012, the current Supervisor recognized the reduction in the general fund’s fund balance. As a result, he developed a budget for 2013 with revenue estimates that were based on the prior year’s actual revenue earned and real property taxes to fully finance the total planned expenditures.
• Town officials cannot ensure that cash disbursements are only made for proper Town purposes. While the Board reviewed all claims that were presented to it for audit, it approved claims totaling $6,183 that did not describe the goods purchased clearly or at all.
• Because Town officials have not established controls over fuel inventories, no one can be sure that fuel purchased by the Town is used only for Town vehicles and equipment.

Key Recommendations

• Continue to develop budget estimates based on known and actual needs and resources. Monitor actual expenditures, compare them to their respective estimates in the adopted budgets and make adjustments as necessary.
• Verify that all claims presented to it are for proper Town charges.
• Ensure that fuel inventories are properly controlled and used only for proper Town purposes.