Town of Albion – Financial Management (2021M-29)

Issued Date
June 25, 2021

[read complete report - pdf]

Audit Objective

Determine whether the Town of Albion (Town) Town Board (Board) developed and monitored realistic and structurally balanced budgets.

Key Findings

The Board generally developed realistic budgets. However, the budgets were not structurally balanced.

  • The Board used fund balance to finance operations, resulting in the four main operating funds’ combined unrestricted fund balance declining from $1,165,418 as of January 1, 2018 to $403,003 as of December 31, 2020, a decrease of 65 percent.
  • If the Board continues to use fund balance at the current levels, it could deplete fund balance in the general town-wide fund by the end of 2024.
  • The Board did not adopt a written multiyear financial plan and written fund balance policy, which limits transparency.

Key Recommendations

  • Adopt structurally balanced budgets that help ensure recurring expenditures are financed by recurring revenues.
  • Adopt a written multiyear financial plan and a written fund balance policy.

Town officials generally agreed with our findings and recommendations and indicated they will take corrective action. Appendix B includes our comment to clarify an issue raised in the Town’s response.