[read complete report - pdf]

Audit Objective

Determine whether the Board and Village officials adopted realistic budgets and effectively managed fund balance and reserves.

Key Findings

The Board could improve its budgeting and management of fund balance and reserves. The Board:

• Adopted budgets with unrealistic estimates, which resulted in operating surpluses and unused appropriated fund balances in the general, water and sewer funds.
• Maintained unreasonable levels of fund balance in the general, water and sewer funds that ranged between 29 percent and 128 percent of subsequent years’ budget appropriations.
• Did not adopt a multiyear financial and capital plan or a detailed reserve plan that included the need and optimal funding level for each reserve.

Key Recommendations

• Adopt budgets with realistic estimates for revenues and expenditures, and which appropriate a reasonable amount of fund balance.
• Reduce surplus fund balances in a manner that benefits Village residents.
• Establish a written policy governing the reasonable amount of fund balance to maintain and adopt a multiyear financial and capital plan and a reserve plan.

Village officials generally agreed with our findings and recommendations and indicated they have begun implementing corrective action.