Audit Objective 

Determine whether the Town of Lapeer (Town) Town Board (Board) developed and adopted realistic budgets.

Key Findings 

The Board did not develop and adopt realistic budgets. As a result, unrestricted fund balance in these funds increased to levels between 85 and 182 percent of the 2024 appropriations, as of December 31, 2023.

The audit determined that estimated revenues were underestimated in the general and highway funds, and budgeted appropriations were overestimated in the general fund, resulting in operating surpluses totaling $669,365 during fiscal years 2021, 2022 and 2023.

• Actual revenues exceeded estimated revenues by an average of $147,251 (81 percent) and $99,605 (29 percent) in the general and highway funds, respectively.
• Actual expenditures were less than appropriations by an average of $38,397 (19 percent) in the general fund.

In addition, the Board has not developed and adopted a written fund balance policy specifying the Town’s objectives and goals for using the accumulated funds.

Recommendations 

The report includes three recommendations that, if implemented, will help Town officials improve their budgeting practices.

Town officials disagreed with certain aspects of our findings and recommendations, but indicated they planned to initiate corrective action.