Purpose of Audit

The purpose of our audit was to assess the Town’s financial condition for the period January 1, 2012 through August 27, 2013.

Background

The Town of Milford is located in Otsego County and is governed by an elected Town Board comprising the Town Supervisor and four Board members. The Town’s 2014 budget totaled $1.2 million.

Key Findings

• The Board adopted budgets that were not financed by sufficient recurring revenues.
• The Board used unexpended fund balance to finance the Town’s increasing expenditures.
• The Board did not consider historical actual results when adopting its budgets from fiscal years 2009 through 2012.
• Town officials used an interfund transfer from the town-wide general fund to finance operations for the part-town highway fund in 2013. This interfund advance inappropriately crossed the tax bases, which led to taxpayer inequity.
• The Board did not develop a comprehensive, multiyear financial and capital plan, nor did it have any other mechanism in place to adequately address the Town’s long-term operational and capital needs.

Key Recommendations

• Do not rely on one-time revenue sources such as appropriated fund balance to fund recurring revenues.
• Appropriate only available fund balance in the budget.
• Utilize budget development tools during its budget development process to ensure adopting realistic budgets based on historical data.
• Ensure that moneys are repaid to the town-wide general fund that were inappropriately transferred to a fund with a different tax base.
• Develop and implement a comprehensive multiyear financial plan.