Audit Objective

Determine whether the Village of Solvay (Village) Board of Trustees (Board) and officials monitored budgets and managed the electric fund’s financial condition.

Key Findings

The Board and Village officials did not develop a budget for the electric fund and adequately manage its financial condition.

From 2016-17 through 2020-21, the electric fund’s total net assets declined by approximately $9 million and cash declined from $4.1 million to $1 million.

Officials also did not:

• Maintain up-to-date records or provide adequate financial reports to the Board.
• Take action to ensure electric fund revenues kept pace with expenses.
• Ensure that annual payments from the electric fund to the general fund totaling approximately $1 million were justified and supported.
• Monitor the general fund budget during 2021-22. As a result, 31 general fund appropriation accounts were over expended by nearly $1.2 million.
• Develop long-term written financial or capital plans.

Key Recommendations

• Address the electric fund’s declining financial condition.
• Maintain timely records and provide the Board with financial reports.
• Adopt and monitor budgets for each fund and develop and adopt written multiyear financial and capital plans.

Village officials generally agreed with our recommendations and indicated they plan to initiate corrective action.