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August 6, 2013

DiNapoli: Poor Budget Practices Found in Halfmoon


The Town of Halfmoon is facing a deficit in its rainy day fund due to budgeting errors and the absence of a long-range financial plan, according to an audit released today by State Comptroller Thomas P. DiNapoli.

From 2009 through 2011, the town board overestimated sales tax revenues by nearly $2 million, including a $1.3 million shortfall in 2009. To cover the shortfall, auditors found the town board appropriated more fund balance in the budget than what was available for both the general and highway funds. Sales tax estimates for 2012 were much closer to actual amount collected but still there was a $9,000 shortfall.

“The use of rainy day funds to regularly finance day-to-day operations is cause for concern,” said DiNapoli. “These reserves are meant to offset sudden economic difficulties, not to cover poor budget planning. Moving forward, town officials need a better handle on the town’s books and need to adopt budgets with realistic revenue estimates that are based on historical and current economic information.”

DiNapoli’s audit shows the town’s general and highway funds have declined significantly from 2007 through 2011. At the start of 2007, Halfmoon’s general fund balance was $4.5 million and its highway fund balance was $440,000. By the close of the 2011, the general fund had decreased to $247,000 and the highway fund was $780,000 in deficit. Combined, the funds decreased from a total of $5 million in 2007 to a deficit of $550,000 in 2011.

Auditors found town officials have not developed a multiyear financial plan that includes a review of historical trends, an analysis of current financial data, or consideration of ongoing economic conditions. The absence of this plan can hinder the board’s ability to make timely and informed decisions about the town’s operations, service and potential funding sources.

DiNapoli made a number of recommendations to the town board in the audit. They include:

  • Adopt budgets with realistic estimates for revenues that are based on historical and current information and develop realistic estimates for available fund balance;
  • Implement a plan to eliminate the fund balance deficit of the highway fund;
  • Monitor the general and highway funds and make appropriate amendments if revenue sources are insufficient to fund the town’s planned operation; and
  • Develop a multiyear financial plan that establishes priorities and goals, considers revenue and expenditure trends, and plans for the future use of reserve funds.

The town agreed with portions of the audit and indicated it has taken steps to address many of the concerns outlined in the report. The full response from town officials is included in the audit.

For a copy of the report, visit: http://www.osc.state.ny.us/localgov/audits/towns/2013/halfmoon.pdf

For access to state and local government spending and more than 60,000 state contracts, visit http://www.openbooknewyork.com/. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

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