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NYS Comptroller


Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Scio – Highway Fund Financial Condition and Records and Reports (2013M-279)

Released: February 14, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Town’s financial operations for the period January 1, 2012 through August 12, 2013.


The Town of Scio is located in Allegany County. The elected five-member Town Board (Board) is the legislative body responsible for managing Town operations. The Town’s 2013 budget appropriations totaled approximately $1 million for the general ($230,000) and highway ($730,000) funds, which were funded primarily with real property taxes and State aid.

Key Findings

  • The Highway fund incurred a significant operating deficit in 2011 totaling more than $180,000 which resulted in deficit unexpended funds. The operating deficit was caused by substantial storm-related expenditures for which reimbursement was not received from the Federal Emergency Management Agency (FEMA) until 2012. Additional storm-related projects were initiated in 2012 for which no reimbursements from FEMA or the State Emergency Management Office (SEMO) were received. Town officials did not develop detailed repair cost estimates and a plan to finance the 2012 projects prior to initiating them to ensure that adequate resources would be available as expenditures were incurred.
  • The general fund also made interfund loans, totaling more than $101,000, to the highway fund to finance highway operations as of December 31, 2012, which were not repaid by the end of the year as required by statute.
  • The Supervisor did not ensure that timely and accurate accounting records were maintained. The accounting records were incomplete and included inaccuracies that hindered filing the 2012 annual update document (AUD) with the Office of the State Comptroller.

Key Recommendations

  • Ensure that a comprehensive plan is developed for future capital projects, which includes detailed cost estimates and the extent to which financing through the issuance of short- and long-term indebtedness is necessary prior to authorizing each project.
  • Develop a plan to repay the interfund loans to the general fund and address any deficit that remains in the highway fund after all Federal and State reimbursements are appropriately accounted for.
  • Provide sufficient oversight of the bookkeeper’s performance to ensure that the Town’s accounting records are complete, accurate and maintained in a timely manner. File the required annual financial report.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email:
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236