By Dan Hust
WOODRIDGE — January 14, 2011 — In an audit released this week, the NYS Comptroller’s Office faulted the Village of Woodridge Board and administration for inadequately managing village finances.
“We found that the general fund is in a dangerously critical state,” wrote the unidentified auditor, based on a review of documents between 2004 and 2009.
For example, the village’s general fund balance was just $48 in the 2007-2008 fiscal year, though it did bounce back to $40,000 the following year.
“However, we found that the general fund has been kept solvent by using the water fund as a funding source,” wrote the auditor. “Furthermore, these balances were inflated because village officials used improper transfers from the sewer fund to pay for general fund expenditures without recording the general fund liability to repay these transfers.
“After recording the liability to repay the sewer fund,” the auditor concluded, “the remaining balance would decline to a deficit of $250,000 as of July 31, 2009.”
The audit discovered that inaccurate financial information had been used year after year to prepare village budgets, with the continuing errors not caught by the board or village officials.
The audit also found that the annual financial report (AFR) prepared by the village’s independent auditors did not line up with the village clerk’s accounting records, usually because no one reconciled the two.
“Thus, any errors that the independent auditor has identified and corrected are not brought to the attention of the clerk-treasurer or the board,” wrote the state auditor.
As a result, “poor budgets have been adopted and the general fund’s financial condition has deteriorated to the point that it is borrowing money to pay its bills.”
Finally, the audit found that virtually any village employee was empowered to make purchases without prior approval.
“And in most instances, purchases were made without soliciting competition,” wrote the auditor. “Thus, the board could not be assured that purchases were made at the best price and the right quality.
“... The mayor and three board members told us that they misunderstood the competitive bidding requirements and believed that the written quotes they obtained served as an appropriate substitute for competitive bidding,” the auditor continued.
Thus, two of the 11 recommendations were to have board members and paid staff take training in financial management and bidding.
(The full audit is available to read at www.osc.state.ny .us/localgov/audits/villages/ 2010/woodridge.pdf.)
Woodridge Mayor Lou Saperstein could not be reached for comment, but in a letter to the Comptroller’s Office (included with the audit report), he indicated the village will heed the auditor’s advice.
“The board does take responsibility for not delving into the monthly reports we are given more thoroughly,” he wrote, “and for relying entirely upon our staff for direction. We do need to be more proactive.”
A new software system, better coordination with staff and auditors, and new operating procedures are being implemented, he said, including no more sewer fund transfers into the general fund.
“More carefully watching our monthly budget reports and trying to keep a handle on expenses has increased the general fund balance by $70,000 over last year,” Saperstein wrote.
Saying officials were not aware that the cumulative purchase of items in small quantities could exceed the bidding threshhold, the mayor explained that a paper trail involving a voucher system will be set up.
Gaining training, however, may be difficult, he added, as all the board members have full-time jobs.
“We feel that the board and the staff are working diligently and with great concern to do what we can to keep costs in line and prepare accurate and timely reports,” Saperstein concluded. “After all, we are all taxpayers here.”
He added that sharing services with the Town of Fallsburg continues to be explored.
Indeed, according to Deputy Mayor Joan Collins, the village met just this week with town officials to work on a coming agreement for Fallsburg to officially and permanently take over water and sewer operations.
“The Town of Fallsburg is great,” Collins told the Democrat. “We’ve always worked very well together.”
Collins disagreed with various parts of the audit, believing the state is negatively painting villages in its audits to further its vision of consolidating small governments.
“At one point they were saying to us we should raise our taxes more,” she related. “... We don’t want to bury our taxpayers!”
Collins also doesn’t believe transfers from the sewer fund to the general fund are illegal, and she said the money situation is monitored monthly by the board – more so after the audit’s findings.
“We try to keep a close watch on what we have and what we’re spending,” she explained.
She admitted the village needed to pay more attention to procurement procedures, and she acknowledged the value of having someone independently verify the village’s finances.
But Collins insisted the board is up to the task assigned it: keeping the village financially in order.
“We work very hard to ensure we do the best for our residents,” she said.