Unusual Fund Balances Discovered In Dayton Audit

DAYTON – An audit of the town of Dayton by the Office of the New York State Comptroller for the period of Jan. 1, 2008, to Dec. 31, 2012, showed unusual fund balance management by the town.

According to the audit’s findings, the town board, “does not routinely monitor financial operations, adopt reasonable budgets, or take appropriate action to maintain financial stability. As a result, the highway town wide fund has a deficit and the general and highway town-outside-village funds have unexpended surplus funds that are excessive.”

Additionally, the audit found that, while the bookkeeper provided Mark Smith, town supervisor, with monthly year-to-date reports, the supervisor did not distribute the reports to board members. As a result, board members were not properly equipped to address the budget variances that occurred in the four major operating funds, which contributed to the unusual fund balances.

Because the village of South Dayton is within the town’s boundaries, the town’s services are accounted for in four major operating funds, which include the general and highway town wide funds, and the general and highway town-outside-village funds.

Results from the audit yielded that select purchases, including a pickup truck with plow and dump body in 2008 and a tractor with boom mower in 2011, used moneys from the highway town-outside-village fund, when moneys should have been used from the highway town wide fund.

While the audit shows that moneys for such purchases was more readily available in the highway town-outside-village fund, residents in the village of South Dayton and residents outside of the village represent two separate tax bases. The audit suggested corrective action to replace the moneys used by taking the total amount of money spent on the equipment from the fund which should have been used, and depositing it into the fund which was used.

Furthermore, the audit found that the unusual surpluses in the general and highway town-outside-village funds placed an unnecessary burden on the taxpayers outside the village. It recommended that the board can reduce its taxes by appropriating fund balance, reallocating sales tax revenues or by creating statutorily authorized reserves for particular purposes.

Specifically, the audit recommended that:

The supervisor should distribute the year-to-date reports to board members for them to monitor budgetary activity and the financial conditions of the funds;

The supervisor should correct the accounting records to properly reflect the amount the highway town wide fund owes the highway town-outside-village fund and the board should develop a plan to repay these funds and address the deficit;

The board should use the surplus fund balance in the general and highway town-outside-village funds in a manner that benefits town taxpayers, such as reducing property taxes or for other statutorily authorized purposes.

Upon receiving the recommendations, Smith responded with a letter to the comptroller explaining how corrective action would take place.

The comptroller’s audit can be read in its entirety at www.osc.state.ny.us/localgov/audits/towns/2013/dayton.pdf.

Numerous attempts by The Post-Journal to contact town officials were unsuccessful.