Purpose of Audit

The purpose of our audit was to review the Town’s financial management and budgeting practices for the period January 1, 2013 through June 30, 2015.

Background

The Town of Salem is located in Washington County and has a population of approximately 2,700. The Town is governed by a five-member Town Board. Budgeted appropriations for 2015 totaled approximately $1.12 million.

Key Findings

• The Board consistently budgeted to appropriate more fund balance in the town-wide general fund than was actually available to finance operations.
• The Board has not developed a multiyear financial and capital plan.

Key Recommendations

• Review estimates of fund balance at year-end as part of the budget process and avoid appropriating fund balance to finance annual operations in excess of what is available.
• Develop a comprehensive multiyear financial and capital plan.