[read complete report - pdf]

Audit Objective

Determine whether the Board adopted realistic budgets and took appropriate action to address the reasonableness of fund balance.

Key Findings

• Town budgeting practices resulted in an increase in fund balance from $8.6 million in 2013 to $20.9 million 2017. Fund balance is projected to increase to $22.8 million at the end of 2018.
• The Board appropriated fund balance ranging from $1.2 million to $1.4 million that was not used to finance appropriation during the fiscal years 2013 through 2017.
• The Board did not establish a formal fund balance policy.

Key Recommendations

• Prepare a realistic budget that allows for current revenues to fund current expenditures to avoid excessive budget surpluses.
• Develop a plan to reduce the amounts of fund balance in a manner that benefits Town taxpayers.
• Establish a comprehensive fund balance policy as guideline for the level of fund balance to be maintained.

Town officials agreed with our recommendations and indicated they planned to initiate corrective action.