Audit Objective
Determine whether the Central New York Regional Market Authority Board of Directors (Board) and officials effectively managed the Authority’s financial condition and planned for future capital and operational needs.
Key Findings
The Board and officials did not effectively manage the Authority’s financial condition and plan for future capital and operational needs. The Authority’s revenues have not kept pace with expenses, resulting in annual losses and the unrestricted net position declining to a deficit of $97,470 at the end of the 2022-23 fiscal year (FY). The Board and officials did not develop and adopt realistic budgets. During the three FYs reviewed, payroll expenses were about $369,144 (20 percent) more than budgeted and the 2022-23 FY commercial lease revenue was $316,500 (36 percent) under budget. If officials do not increase lease revenues, the Authority could realize a $410,000 revenue shortfall in FY 2023-24.
Officials did not adequately monitor and control payroll expenses. For example, they did not budget enough for base pay, overtime and new staff. The Board also approved and paid the former Executive Director (Director), the current Director’s father, $212,154 from January 2020 until January 4, 2023 to handle special projects and other duties such as snowplowing. The Board did not establish a clear job description, work hours or require the former Director to maintain or submit time records, logs or reports showing when he worked or what he completed.
The Board did not ensure a thorough analysis was performed prior to buying a $2.3 million warehouse that is currently vacant and not generating any income. Officials were aware the warehouse needed repairs when they purchased it but did not obtain repair estimates and did not secure long-term lease commitments. Officials estimate repairs will cost $3.2 million and lack the finances to complete the repairs. Without tenants, the warehouse will continue to deplete the Authority’s resources.
Key Recommendations
- Take immediate measures to reduce spending and/or increase revenues.
- Adopt realistic budgets that provide recurring revenues to finance recurring expenses, and closely monitor the budget and cash flow.
- Work to prioritize and address critical infrastructure needs and fill vacant rental space.
Authority officials generally agreed with our recommendations and have initiated, or indicated they planned to initiate, corrective action.