Purpose of Audit

The purpose of our audit was to assess the Town’s practices regarding budget development and adoption for the period January 1, 2012 through August 20, 2013.

Background

The Town of Otsego is located in Otsego County and includes a portion of the Village of Cooperstown. The Town has 3,900 residents and is governed by an elected five-member Town Board, comprising the Town Supervisor and four Council members. The Town’s 2014 annual budget is $1,542,024.

Key Findings

• Improper allocation of sales tax caused taxpayer inequities; part-town funds were taxed more than necessary while the town-wide funds were charged less than they should have been.
• While the Board appropriated more than $1.4 million in fund balance to fund operations in these four years, it actually used $350,672 (24 percent) of this amount during this time, resulting in operating surpluses that limited the intended use of fund balance.

Key Recommendations

• Adopt budgets that properly allocate sales tax revenues in accordance with statutory requirements.
• Reduce the amount of surplus fund balance by continuing to appropriate fund balance and establishing and funding necessary reserve funds.