Town of Dayton cited in state comptroller’s audit

DAYTON – The town of Dayton is one of the municipalities recently cited by the New York State Office of the Comptroller. The town was cited for a lack of monitoring financial operations, according to the report.

“The Board does not routinely monitor financial operations, adopt reasonable budgets, or take appropriate action to maintain financial stability. As a result, the highway townwide fund has a deficit and the general and highway town outside village funds have unexpended surplus funds that are excessive,” the audit states.

The supervisor and town board are responsible for monitoring the town’s fund and keeping track of funds. The bookkeeper provided the supervisor with year-to-date monthly reports but these reports were never distributed to the board members.

“Therefore, Board members were not properly equipped to address the budget variances that occurred in the four major operating funds,” the report stated.

A significant variance in the 2012 budget was for an unbudgeted machinery expenditure. Supervisor Mark Smith said he believed the extra funding in the highway fund belonged in a savings account so a highway truck was purchased, according to the audit.

In 2008, the town purchased a pickup truck with a plow and dump body for a total of $27,155. A tractor with boom mower was purchased in 2011 for $48,750. Both these purchases came from the highway outside village fund and were levied within the entire town but should have been changed to the highway outside village fund.

“The Supervisor stated the former bookkeeper believed that the 2011 purchase would be a town outside village expenditure, even though the budget and the Board resolution for the purchase appropriately reflected this as a townwide expenditure,” the report stated. “The effect of those erroneous accounting entries is that the highway townwide fund owes the highway town outside village fund an additional $75,905.”

There was a prior deficit of an unexpended fund deficit of $81,032 as of Dec. 31, 2012 so the total reported deficit will be increased to $156,937 when the purchases from 2008 and 2011 are reflected in the accounting records. As of Dec. 31, 2012 the general outside fund unexpended surplus fund is $26,697, which is 102 percent of the 2013 budget; the highway outside village will have unexpended surplus funds of $133,414, 58 percent of the 2013 budget.

The report also states the town eliminated the tax levy for the general outside village fund but not for the highway outside village fund. The Comptroller’s Office said this tax levy is an “unnecessary burden” for residents.

“The Board can reduce their taxes by appropriating fund balance, re-allocating sales tax revenues, or by creating statutorily authorized reserved for particular purposes,” the audit says.

The comptroller’s office also had the following recommendations for the town: the supervisor should distribute all year-to-date reports to board members for monitoring; the supervisor should correct accounting records to properly reflect the amount the town wide fund owes the outside village highway fund in addition to the board developing a plan to repay those funds; and the board should use surplus fund balance in the general and highway outside village funds that benefits town taxpayers.

Smith responded to the audit stating the bookkeeper’s monthly year-to-date reports are distributed to board members. Smith said the excessive funds in the highway funds are necessary.

“A certain level of cash on hand is needed to pay highway invoices in a timely manner. For example, CHIPS funding cannot be received until the highway road work is completed. Invoices generated from the materials used to complete the work are due way before the CHIPS money enters the town’s bank account,” Smith wrote in his response.

Smith finally said the board will correct and develop a plan to address the problems created by the machinery bookkeeping errors. The full report can be viewed at www.osc.state.ny.us/localgov/audits/towns/2013/dayton.pdf.

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