Purpose of Audit

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the Village’s tentative budget for the 2014-15 fiscal year are reasonable.

Background

The Village of Endicott, located in Broome County, issued debt totaling $2 million to liquidate the accumulated deficit in the Village’s general fund as of May 31, 2004. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their tentative budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

• Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget for the general, electric, library and parking funds are reasonable.
• The water and sewer funds’ tentative budgets are not balanced and include a deficit of more than $273,000 and $264,000, respectively, or approximately 10 percent in each fund. Village officials told us they recognized the deficits and planned to raise water and sewer rates to make up the difference.
• The Village’s tentative budget exceeds the property tax levy limit set by statute.

Key Recommendations

• Address the deficits in the water and sewer funds to avoid adopting unbalanced budgets that include appropriations without sufficient financing sources.
• Ensure compliance with the tax levy limit law by either adopting a local law to override the tax cap or lowering the budget totals to be within the allowable levy limits.