Audit Objective
Determine whether the Town of Philipstown (Town) Town Board (Board) properly managed financial operations.
Key Findings
The Board did not properly manage the Town’s financial operations and used the Town’s general fund to pay for the Garrison Landing Water District’s (GLWD’s) operation and maintenance (O&M) costs. As a result, during the audit period, the Town’s residents paid $2.4 million of the GLWD’s costs that only benefited taxpayers within the water district and resulted in the decline of the general fund balance from $1 million to $53,137. Specifically, the Board did not:
- Appropriately budget for GLWD operations. For example, although the Town had a GLWD water fund and budgeted approximately $20,000 for debt service in the fund, the Board did not budget for GLWD appropriations in the general fund each year where annual GLWD expenditures were funded and increased from $85,436 to $975,475 over the six-year audit period.
- Adopt a transparent budget that clearly communicates the costs associated with GLWD operations or the associated funding sources to taxpayers.
- Develop, adopt and periodically update a written multiyear financial plan to help guide the budget development process or establish funds to help finance future expenditures.
Key Recommendations
- Develop and adopt budgets for each fund with sufficient estimates of revenues and expenditures based on historical trends and other known factors.
- Develop and adopt a multiyear financial plan.
Town officials generally agreed with our findings and recommendations and indicated they plan to initiate corrective action. Appendix C includes our comments on issues raised in the Town’s response letter.