Audit Objective
Did the Village of Fonda (Village) Board of Trustees (Board) effectively manage the water fund’s financial operations?
Audit Period
June 1, 2024 – November 30, 2025
We extended our scope back to June 1, 2022, for review of budgetary trends, to April 2024, for review of relevied delinquent inside-Village accounts and forward to March 31, 2026, to review actual revenues.
Understanding the Audit Area
A board is responsible for effectively managing a water fund’s financial operations to help ensure revenues are sufficient to finance operations, maintain infrastructure and meet service needs while maintaining a sound financial condition.
The Village’s 2025-26 water fund budgeted appropriations totaled $514,495 with metered water sales accounting for $508,495 or 99 percent of budgeted revenues.
Audit Summary
The Board did not effectively manage the water fund’s financial operations, causing the fund balance to decline and reducing the Board’s ability to respond to emergencies, infrastructure and service needs or other unanticipated occurrences.
The Board did not adopt structurally balanced budgets or review water rates to ensure they were sufficient to maintain the water fund’s fiscal stability. The Board annually relied on appropriating fund balance (which represents the difference between revenues and expenditures accumulated over time) to finance water fund operations rather than establishing water rates sufficient to support operations. From fiscal years 2022-23 through 2024-25, the Board adopted budgets for the water fund with planned operating deficits that totaled $343,651. The Board’s budgeting practices caused unrestricted fund balance in the water fund to decline by $238,675 during this period. Additionally, because the Board did not adopt sufficient water rates to fully support the 2025-26 fiscal year water fund operations, we project a shortfall of $129,088 with metered water sales for the 2025-26 fiscal year totaling $379,406.
The Board did not provide adequate oversight of the Village Clerk-Treasurer (Clerk-Treasurer) who reviewed the water billings, and mailed, collected, recorded and deposited water bill payments, applied penalties and fees to customer accounts and prepared the list of unpaid inside-Village customers to be relevied by Montgomery County (County). As a result, errors or irregularities could occur without detection or correction. Additionally, the Board did not annually audit or cause the Clerk-Treasurer’s records to be audited.
This report includes five recommendations that, if implemented, will improve the Board’s management of the water fund’s financial operations and strengthen its oversight of the Clerk-Treasurer’s water duties to help ensure the water fund is self-sustaining. Village officials generally 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 Office of the New York State Comptroller’s (OSC) authority as set forth in Article 3 of the New York State General Municipal Law (GML). 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 GML. 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 Clerk-Treasurer’s office.