Audit Objective
Did the Town of Oxford (Town) Board (Board) receive complete and accurate financial reports and effectively manage and plan the Town’s financial condition?
Audit Period
January 1, 2019 – December 31, 2023.
We extended our audit period back to December 31, 2007 to analyze fund balance trends, back to March 24, 2017 to compare current findings to the previous Office of the State Comptroller (OSC) audit and identify Board members who were on the Board since the previous audit, and forward to December 31, 2024 to review the Town’s Annual Financial Report (AFR) filings.
Understanding the Program
A key measure of a town’s financial condition is its level of fund balance, which is the difference between revenues and expenditures accumulated over time. The Board is responsible for managing and controlling the Town’s financial affairs, which included adopting the annual budget and establishing financial policies. The Town Supervisor (Supervisor) serves as the Town’s chief fiscal officer and budget officer. He is responsible for providing the Board with financial reports.
The Town’s general and highway fund 2023 appropriations totaled $1.3 million.
OSC previously released an audit of the Town in 2017 which identified budgets that relied on fund balance to fund recurring expenditures, insufficient financial information provided to the Board and delayed filing of AFRs.
Audit Summary
The Board did not receive complete and accurate financial records and reports or request additional financial information, which hindered its ability to monitor the Town’s financial condition. Because the current and former Supervisors (Supervisors) did not maintain complete and accurate financial records and reports, the Board did not provide appropriate oversight by reviewing records, such as fund balance levels or other balance sheet details. As a result, the general fund, town-wide (general fund TW) and highway fund, town-wide (highway fund TW) began the 2024 fiscal year with a combined $206,637 fund balance deficit. Also, the Board appropriated $315,279 of nonexistent town-wide (TW) fund balance in the 2019 through 2023 fiscal years and used $350,000 in revenue anticipation notes (RANs) to address cash flow issues, which caused the Town to incur $11,430 in borrowing costs. When budgets are not structurally balanced, funding shortfalls are created that can lead to further fiscal stress. Officials did not:
- Have sufficient fund balance to appropriate.
- Maintain records of fund balance amounts or complete monthly bank reconciliations by using the Town’s accounting records.
- Implement any recommendations from our 2017 audit.
- Develop long-term written financial or capital plans.
Additionally, the Supervisors did not file the 2019 through 2023 fiscal year AFRs in a timely manner, which OSC would have analyzed for possible fiscal stress. Using our recalculated results of operations for the Town for the 2019 through 2023 fiscal years, we calculated the Town’s fiscal stress designation and determined that the Town would have had a fiscal stress designation in every year analyzed.
The Supervisor told us that he was aware OSC would assign a fiscal stress score, and he felt that if a stress designation was assigned, it may have changed the budgets that the Board would have approved. However, the Supervisor did not believe that the Town was in fiscal stress because it did not have long-term debt. But the absence of debt by itself is not an indication that the Town has a stable financial position.
When a town’s financial resources are limited, it becomes increasingly difficult for officials to provide the same level of services and respond to unanticipated emergencies.
The report includes 13 recommendations that, if implemented, will help the Board and Town officials improve their financial management practices. Town officials agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law. Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of the New York State General Municipal Law. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in the Town Clerk’s office.