New York State Comptroller Thomas P. DiNapoli’s office released a report and series of audits today reviewing compliance by villages with financial reporting and other requirements.
By law, a village’s chief fiscal officer (CFO) is required to file an annual financial report (AFR) with the State Comptroller’s office 60 to 120 days after the close of their fiscal year. The AFR must be made available to the public and provides detailed information about the village’s financial position and results of operations, and include revenues, expenditures, debt, cash reserves and fund balance.
“Villages provide critical services to residents, and many are doing a good job of giving the public a transparent look at how they are spending taxpayer money,” DiNapoli said. “Those that don’t file are leaving taxpayers in the dark about how their money is being used or if fiscal problems exist. Financial transparency is a cornerstone of good governance, promoting accountability and reducing opportunities for financial mismanagement.”
For fiscal year 2023, 246 (46%) of the state’s 532 villages filed their AFR with the State Comptroller on time, 210 villages (40%) filed late, after the statutory due date, and 76 villages (14%) had not filed as of Sept. 13, 2024. These 76 villages, with a total population of more than 369,000 people, levied taxes totaling $288 million. Eleven of the 76 villages filed as of Dec. 13, 2024.
While the share of villages filing their AFR on time improved from 30% to 46% since 2019, the number of villages that did not file at all in 2023 grew from six in 2019 to 76. Failure to file by the statutory deadline or not filing raises questions about the financial standing of the village as well as the general effectiveness of its management, and leaves residents, policymakers, and other interested parties without information regarding the fiscal performance of their government.
Auditors selected 30 villages to examine and determined 25 did not file their AFR for fiscal year 2023, four filed their report significantly late (an average of 331 days), and only one filed within the 90-day requirement. All but one of the localities’ CFOs were aware of the filing requirement.
DiNapoli’s auditors found that 21 of the selected villages failed to maintain complete and up to date accounting records. One village did not record $2.2 million in payroll expenditures in its accounting records along with $2 million in property tax revenues. In 16 villages, the CFOs provided incomplete financial reports, with poor or late records, to the boards.
Incomplete records make it difficult for boards to develop realistic budgets, adopt proper property tax levies, monitor operations, or conduct long-term planning. They also prevent taxpayers from assessing a village’s fiscal standing and determining whether property tax increases are justified or needed. Auditors found 26 of the 30 villages raised property taxes 1% to 21% from fiscal year 2022 to fiscal year 2024, but 18 of these had incomplete records, including five that had tax levy increases exceeding 10%.
Village boards are also required to annually audit or cause to be audited the village’s AFR and supporting records. Auditors found no evidence of an annual audit being conducted for 28 of the 30 selected villages. Without an audit there is little independent verification that transactions have been accurately recorded, cash is properly accounted for, and records are complete and up to date. Although two village boards engaged certified public accountants (CPAs) for fiscal year 2023, the CPA audits were not completed in a timely manner, with the CPA audits presented to the two boards nine and 16 months after fiscal year-end, respectively.
Village boards oversee the policy, financial, and ethical framework for village operations. DiNapoli urged board members to better uphold their responsibilities and comply with transparency requirements by making financial information accessible and by performing annual audits. His office also provides training sessions for village board members on their duties and responsibilities:
Report
Transparency and Accountability of Fiscal Activities in Villages
Individual Village Audits
Village of Almond – Transparency of Fiscal Activities
Village of Cedarhurst – Transparency of Fiscal Activities
Village of Copenhagen – Transparency of Fiscal Activities
Village of Great Neck – Transparency of Fiscal Activities
Village of Holley – Transparency of Fiscal Activities
Village of Hoosick Falls – Transparency of Fiscal Activities
Village of Lisle – Transparency of Fiscal Activities
Village of Mount Kisco – Transparency of Fiscal Activities
Village of North Syracuse – Transparency of Fiscal Activities
Village of Pomona – Transparency of Fiscal Activities