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Audit Objective

Did the Town of Wawayanda (Town) Town Board (Board) and officials properly manage financial operations?

Audit Period

January 1, 2023 – September 17, 2024.

We extended our audit period back to January 1, 2019 to analyze financial trends.

Understanding the Program

The Board must provide oversight to ensure financial operations are properly managed. 

The Town Supervisor (Supervisor) serves as the chief executive officer, fiscal officer and the Board-appointed budget officer. The Supervisor is responsible for ensuring that day-to-day financial activities are recorded in the accounting system.

The Board appointed a Supervisor’s Accountant (Accountant) to make journal entries, reconcile the bank accounts and file the mandated Annual Financial Reports (AFRs). 

The Town’s 2023 appropriations totaled $5.9 million for all funds and the surplus fund balance at the end of 2023 totaled $7.7 million. 

Audit Summary

The Board and Town officials did not properly manage financial operations, and the Board did not provide adequate oversight.

• The Board adopted unrealistic budgets. For example, the Board continuously adopted budgets that underestimated revenues by approximately $5.2 million and appropriated $2.2 million of fund balance that was not needed to fund operations during our audit scope period.
• The Board did not effectively manage the Town’s fund balance over the last five fiscal years, resulting in operating surpluses that increased unrestricted fund balance from $4.3 million for all funds to $7.7 million as of the end of 2023 or 118 percent of the 2024 appropriations. The Board did not adopt a fund balance policy. Therefore, no rationale was established for maintaining this level of unrestricted fund balance. As a result, real property tax obligations for Town residents were likely higher than necessary.
• The Board appropriated portions of fund balance in 2019 through 2023. However, the Town realized operating surpluses and did not use all the $2.6 million appropriated fund balance to fund operations.
• The Board did not develop a written multiyear financial plan or develop a comprehensive capital plan that addresses capital needs. Without such plans, the Board cannot assess expenditure commitments, revenue trends, financial risks and the affordability of new services and/or capital investments.
• The Board did not request and is not receiving up-to-date financial reports or a detailed statement of money received and disbursed on a monthly basis. As a result, the Board could not effectively evaluate the Town’s financial condition and lacked the information necessary to make informed decisions.
• The Town is using accounting codes other than those prescribed by the New York State Comptroller’s Office (OSC) which limits the Town’s ability to properly report financial operations to interested parties, as required.
• The accounting records are not in agreement with the AFR filed by the Town. As a result, there is little assurance the information used to make financial decisions is accurate and complete.
• Town officials maintained an excessive number of bank accounts¹ which limited their ability to properly manage and control the Town’s cash. Maintaining an excessive number of bank accounts also exposes the Town’s funds to an increased risk of errors and irregularities. 

The report includes 13 recommendations that, if implemented, will improve the Town’s financial operations. Town officials disagreed with certain aspects of our findings and recommendations. Appendix C includes our comments on issues raised in the Town’s response letter. 

We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law. Our methodology and standards are included in Appendix D. 

The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of the New York State General Municipal Law. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in the Clerk’s office. 

1 Forty-one bank accounts in two different banks as of August 31, 2024 and 53 bank accounts among three different banks during our audit period.