Town of Hempstead Local Development Corporation – Fund Balance (2021M-61)

Issued Date
July 02, 2021

[read complete report - pdf]

Audit Objective

Determine whether the Town of Hempstead Local Development Corporation’s (THLDC) Board of Directors (Board) effectively managed fund balance.

Key Findings

The Board did not effectively manage fund balance.

  • The Board did not develop or adopt a fund balance policy that addresses what level of fund balance is needed or how any surplus funds will be used and the timeframe for doing so.
  • The unrestricted fund balance grew to $2.4 million as of December 31, 2020.
  • Allowing $2.4 million to accumulate and sit idle without a specific purpose to benefit the Town is not in the public’s best interest.

Key Recommendations

  • Develop and adopt a comprehensive written fund balance policy and a plan to use surplus funds.

THLDC officials disagreed with certain aspects of our findings and recommendations but indicated they have initiated corrective action. Appendix B includes our comments on issues raised in the THLDC’s response letter.