Purpose of Audit
The purpose of our audit was to examine the County’s financial condition for the period January 1, 2012, to February 21, 2013.
Broome County, located in the central southern portion of upstate New York commonly referred to as Southern Tier, has a population of approximately 200,600. The County is governed by the Board of Legislators comprising 15 elected members, one of whom serves as the Chair. The County’s budgeted expenditures for fiscal year 2013 included amounts totaling approximately $247.7 million for the general fund, $9.6 million for the County road fund, and $2.3 million for the road machinery fund.
- County officials did not consistently maintain sufficient levels of fund balance to support current and future operations or provide a mechanism to cover budgeted revenue shortfalls and, therefore, had to rely on short-term borrowings. The County did not maintain sufficient current and recurring revenues to finance the County’s operations. Thus, the fund balance fluctuations occurred because the general fund was spending more than it received in revenue until 2011 and 2012, when the general fund began to generate more revenue, while expenditures remained relatively flat. While the County’s general fund seems to be in the early stages of recovery, the significant reliance and use of fund balance to finance operations has critically impacted the County’s cash flow. In December 2009, the County incurred a cash flow shortage in the general fund that required the issuance of short-term debt to borrow against future anticipated tax and revenue sources.
- Develop a fund balance policy that establishes a reasonable amount of fund balance to be maintained to meet the County’s needs, provide sufficient cash flow, and reduce or eliminate reliance on short-term borrowing.
- Adopt budgets that include financing recurring expenditures with recurring revenues, and not rely on one-time revenue sources.