Audit Objective 

Determine whether the Town of Leicester (Town) Board (Board) effectively managed fund balance. 

Key Findings 

The Board did not effectively manage the Town’s fund balance and continued to unrealistically estimate revenues and appropriations in the adopted budgets. The Board did not correct the deficiencies noted in our prior audit (Budgeting and Financial Oversight (2015M-158), released November 2015), adopt written fund balance or reserve policies and did not properly establish reserves. In addition, the Board did not ensure it received up-to-date, accurate financial reports in a timely manner, which hindered its adoption of realistic budgets and multiyear financial or capital plans.

As a result, officials maintained significant unrestricted fund balance in the town-wide (TW) and town-outside-village (TOV) funds that as of January 1, 2024 were sufficient to fund the entire 2024 budgeted appropriations. Also, the water fund had a deficit fund balance of $80,597. 

We project that the Town will have small operating surpluses in 2024, which will increase the significant fund balances. The Board continued to unrealistically estimate revenues and appropriations in the 2025 budget, which will likely result in operating surpluses that will further increase the significant fund balances in the general and highway TW and TOV funds. 

Recommendations 

The audit report includes nine recommendations that, if implemented, will improve the Town’s financial management.

Town officials generally agreed with our findings and indicated they will initiate corrective action. Appendix B includes our comments on the Town’s response letter.