The Central New York Regional Market Authority’s financial position has deteriorated, and the cash available to pay operating costs declined from fiscal year (FY) 2020-21 to FY 2022-23, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. If authority officials do not take measures to increase revenues, reduce expenses, or both, the authority will continue to have annual net losses and will not have sufficient funds for its operations.

The audit faulted the board for not properly managing the authority’s financial condition, including not developing realistic budgets, not monitoring operations and expenses, and not doing a thorough analysis before spending over $2 million on a warehouse that needs extensive renovations and has been a drain on the authority’s budget.

“The Central New York Regional Market Authority board and officials need to turn its financial operations around before its fiscal situation gets worse. I am glad they took our findings and recommendations seriously and are working on a corrective action plan,” DiNapoli said.

The Syracuse-based public authority operates a farmers market and flea market to help vendors sell their products to the public and has programs and services to promote agriculture in Central New York. It is overseen by a 13-member board, consisting of appointees from Onondaga, Oswego, Cayuga, Madison, Cortland, Oneida, and Wayne counties, as well as the commissioner of the state’s Department of Agriculture and Markets. Under state law, board members monitor and oversee fiscal and management operations, and have a fiduciary duty to act in the best interest of the authority, its mission and the public.

Key findings in the audit:

• Decline of Financial Condition: Over the past three years, the authority’s total net position declined from $6 million at the start of FY 2020-21 to $4.9 million at the end of FY 2022-23. Cash available to pay operating costs declined from $502,807 in FY 2020-21 to a deficit of $6,539 in FY 2022-23. Auditors found the authority’s recurring revenues are not enough to cover recurring expenses even as the authority estimates that its facilities need tens of millions of dollars in renovations. It also estimated that, without changes, it could have a $410,000 shortfall in commercial lease revenues in FY 2023-24. Auditors also found that the authority used $6,500 in funds intended for capital projects to cover operating costs.
• Warehouse Purchase Draining Resources: In September 2020, the authority bought a 50,000 square foot warehouse for $2.3 million without a thorough analysis of needed renovations, including a roof replacement. It also lacked a business plan for securing renters. The two renters it did have moved out. Auditors were told by authority officials the building is currently unrentable because of its bad roof and damage from vandalism. The authority is paying $12,900 a month on the mortgage for the warehouse which authority officials say needs $3.2 million in work.
• Unrealistic Budgets and Poor Payroll Monitoring: From FY 2020-21 through FY 2022-23, the authority experienced net losses each year that averaged about 18% of the budget and totaled more than $1 million over the three years. The board received quarterly budget reports late and did not adjust the budget when expenses went over budget or revenues fell short. Auditors found revenue did not meet expectations and that the authority lost multiple commercial tenants during the three years reviewed, yet it budgeted for hundreds of thousands of dollars in commercial lease revenue that never materialized. Payroll expenses were 20% higher, or $369,144, over budget estimates during the period. Payroll was significantly higher than budgeted for because the budgets did not include pay increases, overtime and new staff. The authority also paid its former executive director, who is the father of the current director, $212,154 to handle special projects, including snowplowing. There was no job description for his position, and the authority kept him on the payroll for a longer period than expected. The board also did not require him to submit time records or report work he completed.

Auditors made 14 recommendations to the authority to improve its financial condition. Key recommendations for the board include take immediate measures to reduce spending, increase revenues, or both; adopt realistic budgets, monitor actual results, and address shortfalls; and prioritize critical needs and fill rental space. In response to the audit, the board president said the authority agreed with the financial findings of the audit and is acting on the recommendations.

Audit 
Central New York Regional Market Authority Financial Condition Audit