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Audit Objective

Determine if the Board adopted realistic budgets for the sewer fund and took appropriate action to maintain the Village’s overall fiscal stability.

Key Findings

• The Board consistently overestimated revenues and underestimated appropriations in the sewer fund budgets for fiscal years 2014-15 through 2016-17, resulting in operating deficits and a deficit fund balance of $36,539 as of May 31, 2017.
• The general, water and sewer fund all experienced cash flow issues due to the sewer fund’s financial problems.
• The Board has not adopted a fund balance policy.

Key Recommendations

• Adopt budgets that include adequate recurring revenues to finance recurring expenditures.
• Formulate a plan to eliminate the sewer fund deficit.
• Adopt a fund balance policy to govern the level of fund balance to be maintained in each of the Village’s funds.

Village officials generally agreed with our recommendations and have initiated, or indicated they planned to initiate corrective action.