Main Banner

NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015

DiNapoli: Audit Reveals Issues Behind Broome County's Fiscal Stress

February 8, 2018

From 2014 through 2016, Broome County depleted its fund balance to dangerously low levels jeopardizing public services and long-term infrastructure investments, according to an audit released today by State Comptroller Thomas P. DiNapoli. The audit highlighted the need for county officials to develop a balanced budget for 2018 as well as a multi-year financial plan.

In September, the county received a designation of "significant fiscal stress" in the latest round of scoring from DiNapoli's Fiscal Stress Monitoring System based on 2016 fiscal year data reported by the county. The county has the fourth-highest fiscal stress score in the state.

"A healthy fund balance is a key measure of a municipality's financial condition," said DiNapoli. "By consistently relying on fund balance to finance operations, the county's fiscal health has deteriorated. County Executive Garnar has worked to improve the county's budget practices in order to prevent future services from being put at risk. But county officials all need to work together to turn around the county's finances."

"I want to thank State Comptroller DiNapoli for completing this audit of Broome County that we requested," said Broome County Executive Jason Garnar. "The results only confirm the financial hole we were in when I took office. I look forward to working on a corrective action plan with the Comptroller DiNapoli's office to repair Broome County's finances."

As of Dec.31, 2013, the county's general fund had $10.1 million in unassigned fund balance that could be used to fund ensuing years' operations, reserve for future expenditures or maintain for unexpected occurrences.

By the end of 2016, the county's reported unassigned fund balance in the general fund was $255,000, less than 0.1 percent of gross expenditures.

Additionally, as of Dec. 31, 2016, the county's combined unassigned and assigned fund balance (excluding appropriated fund balance) were one of the lowest in the state with only 2.7 percent of gross expenditures available. If the county's fund balance was in line with the average amount of fund balance retained by other counties (17.1 percent of gross expenditures), its fund balance would need to be approximately $56 million higher.

While the County Executive and County Legislature are responsible for determining the amount of fund balance deemed reasonable to retain, adopting budgets that leave $255,000 as a cushion for a general fund operation in excess of $247 million (as was adopted for 2017) provides no margin of error.

In an October 2013 audit of the county, DiNapoli's auditors recommended that county officials adopt a specific policy establishing the minimum levels of fund balances that should be maintained. As of December 2016, officials had not established such a policy.

Other findings in the audit include:

  • Broome County is one of only seven counties in the state that have issued short-term debt to address cash flow needs over the last five years. Auditors found the county issued short-term debt averaging $12.5 million annually for that period;
  • County officials have deferred needed investments into equipment and vehicle fleets;
  • County operations that should be self-sustaining are not and several have required consistent subsidies from the general fund, including: the airport, two entertainment venues, the nursing home and the public transportation system. These subsidies averaged $7 million per year during the 2014-2016 fiscal years.

DiNapoli recommended county officials:

  • Cease using fund balance to finance recurring expenditures;
  • Develop a fund balance policy that establishes a reasonable amount of fund balance to be maintained to meet the county's needs, provide sufficient cash flow, and reduce or eliminate reliance on short-term borrowing;
  • Adopt budgets that provide for financing recurring expenditures with recurring revenues;
  • Create a long-term financial plan; and
  • Update the county's capital plan and take steps to bring long-term assets and infrastructure in line with the plan.

For a copy of the final audit, go to: http://www.osc.state.ny.us/localgov/audits/counties/2018/broome.pdf

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 140,000 contracts, billions in state payments and public authority data. Visit the Reading Room for contract FOIL requests, bid protest decisions and commonly requested data.