Audit Objective 

Determine whether the Town of Pleasant Valley (Town) Town Board (Board) developed realistic budgets and properly managed reserve funds.

Key Findings 

The Board did not develop realistic budgets or properly manage reserves. As a result, the Town had significant recurring operating surpluses and may have levied more taxes than necessary. From fiscal years 2019 through 2023, the Board: 

• Did not consider historical or known revenues and expenditure trends when preparing annual budgets. As a result, revenues were underestimated and expenditures were overestimated in the general and highway funds generating operating surpluses totaling $5.1 million and $1.2 million, respectively.
• Appropriated fund balance to offset annual deficits that was not needed to fund operations, including $439,870 in the general fund for the audit period and $603,395 in four of the five years reviewed for the highway fund.
• Accumulated surpluses resulting in unrestricted fund balances totaling $4.5 million and $2.4 million in the general and highway funds, respectively, as of December 31, 2023.The Board did not adopt a fund balance policy and lacked a plan on how the funds will be used. As a result, there was no rationale for accumulating significant fund balances.
• Did not adopt a long-term plan or reserve policy that provided transparency to taxpayers when funding or using reserve fund balances.

Key Recommendations 

• Adopt budgets that contain realistic estimates based on available current data and historical trends.
• Develop a plan to use excess fund balance to benefit taxpayers.
• Adopt fund balance and reserve policies.

Town officials generally agreed with our findings and recommendations and indicated they have initiated or plan to initiate corrective action.