Purpose of Audit

The purpose of our audit was to review the Village’s financial condition for the period June 1, 2011, to February 1, 2013.

Background

The Village of Nichols is located in the Town of Nichols, Tioga County. The Village is governed by a Board of Trustees which comprises five elected members including the Mayor. The Village’s annual budget for the 2012-13 fiscal year is $101,711, funded mainly from real property taxes, State aid and non-property tax distributions.

Key Findings

• We found that from 2007-08 to 2011-12 the Village had unforeseen expenditures of $89,500 for increased water costs and major flood damage. Because the Village has a very small tax base, and the Board did not include contingency appropriations in its budgets, the Board had no mechanism to react to unforeseen expenditures of this magnitude other than to hope that it might get some revenue source, like Federal or State aid, if there was an emergency.
• The Village was able to avoid fiscal instability because it received unanticipated revenues in four of those five years totaling approximately $120,500, of which $50,064 was Federal and State aid for the reimbursement of emergency disaster work due to the flooding.

Key Recommendations

• Develop realistic budgets, and closely monitor revenues and expenditures and make budget modifications throughout the year.
• Consider including a contingency appropriation it its annual budgets.