Purpose of Audit
The purpose of our audit was to review the Village’s financial condition for the period June 1, 2010, through May 31, 2013.
Background
The Village of Keeseville is located in Essex County. The Village is governed by a Board of Trustees which comprises four elected Trustees and an elected Mayor. The Village’s budgeted appropriations for the 2013-14 fiscal year are approximately $1.4 million.
Key Findings
The recorded total fund balance for the general, sewer, and water funds at the end of the last three fiscal years were either overstated or understated due to various accounting errors. As a result, the Clerk-Treasurer and the Board were not aware of the general, sewer, or water funds’ actual operating results and overall financial condition.
The Board did not adopt realistic budgets and did not properly monitor financial operations, which contributed to the Village being in fiscal stress at the end of the 2011-12 fiscal year. Specifically, the general, sewer, and water funds had a combined total deficit fund balance of $4,623 and a combined cash balance of only $6,451 at the end of the 2011-12 fiscal year.
The operating funds only had a combined cash balance of $6,451 because the community development fund made an interfund advance of $20,000 to the general fund during the 2011-12 fiscal year.
The sewer fund remained in fiscal stress at the end of the 2012-13 fiscal year because the sewer rates did not generate sufficient revenues to cover the costs incurred, resulting in the sewer fund having a total fund balance deficit of $35,029.
The financial condition of the general fund and water fund improved and both funds had a healthy fund balance at the end of the 2012-13 fiscal year.
Key Recommendations
Ensure that the Village’s accounting records for the operating funds are complete and accurate. Ensure that the accounting records are properly adjusted to reflect correct account balances.
Develop and adopt budgets that include realistic estimates for revenues and expenditures based on historical data and supporting source documentation.
Authorize all interfund advances and should ensure that they are properly recorded in the accounting records.
Review the sewer and water rates periodically and revise them, if necessary, to generate sufficient revenue to cover expenditures