Officials in Corfu neglected to properly manage budgets and accounting for the village's sewer fund according to a recent office by the state's comptroller's office.
The three key findings of the audit:
- The board routinely adopted budgets that were not reasonably estimated, which resulted in operating deficits;
- The board did not develop and adopt multiyear capital and financial plans;
- The board did not annually audit financial records and therefore did not identify inaccuracies.
There is no accusation of malfeasance in the report.
The auditor found that the lack of realistic budgets led to a gap between actual revenues and expenditures. The board did not "adequately consider the effect that problematic cash flow issues and the formation of two new sewer districts would have on the annual budgets," according to the report.
The auditor said estimates were inadequate because the board anticipated the village would receive additional revenue from new sewer districts sooner and greater amounts than it actually did. The board also underestimated expenses.
The clerk-treasurer, according to the report, did not include a cash flow analysis in her reports to the board.
"In addition, the Clerk-Treasurer recorded that the sewer fund owed the general fund $61,0003 as of May 31, 2017, but she could not explain the purpose of these entries or provide evidence for their accuracy," the report reads. "As a result, we question the accuracy of her records."
These discrepancies would have been detected by the board with annual audits but board members told the auditors that the board did not hire a CPA annually for an audit as a cost-saving measure.
Annual audits are required by law.
The audit did find that sewer customers were billed properly and the proper amount of sewer rents were collected.
In a letter to the auditor from Mayor Joseph Johnson, the board said it would correct the discrepancies by adopting the auditor's recommendations, including drafting more realistic budgets, develop a multi-year financial plan, and hire a CPA to annually audit the district's financial records.
