LINKS
2018-05-15 / Front Page

Village of Franklin Mismanaged Funds, Comptroller Says

By Lillian Browne

FRANKLIN - The New York State Comptroller issued a report earlier this month stating that village of Franklin officials have been levying excess property taxes, without a plan, to the detriment of taxpayers and in violation of state guided municipal fiscal policy. Franklin Mayor Tom Briggs responded to the Comptroller in April, agreeing with the state’s findings. Briggs has also agreed to implement policies, plans and procedures to correct the problems.

An audit of village finances found that the general fund year-end balance increased by 46 percent from 2014-15 through 2016-17; that budgeted general fund appropriations in 2015-16 and 2016-17 exceeded expenditures by an annual average of 30 percent while actual revenues exceeded budgeted revenues in 2014-15 and 2015-16 by an annual average of 18 percent; there is no multi-year financial or capital plan in place - nor does the village have a fund balance policy and that the village Clerk did not provide Trustees with adequate financial reports.

The tiny municipality had a population of 353 and a budget, or planned spending, of $150,000 in 2017-18. Auditors examined records from 2014 through 2017 to analyze financial trends in the village.

What they found was that officials consistently underestimated revenue (money coming into the village coffers) as well as overestimated expenditures (money being paid out to operate the village.)

While it is not unreasonable to maintain an excess fund balance for cash flow purposes and to provide a cushion against unforeseen circumstances, the Comptroller said, the village must both have a policy for those funds, specific planned projects that the money is to be used for and established reserve (debt service or capital) “savings” accounts.

Year-end fund balances in the village of Franklin are un- reasonable, according to the Comptroller’s report, and annually increased due to the adoption of “unrealistic budgets.”

Unassigned fund balance was 184 percent of actual expenditures for the fiscal year ending May 2017, the report continued and trustees unnecessarily increased real property taxes by 2.4 percent.

To remedy the fiscal mismanagement, Franklin officials agreed to implement the Comptroller’s recommendations of developing and adopting a fund balance policy that establishes the level of fund balance to be maintained; adbudgets that include realistic estimates for revenues and expenditures; develop and adopt a comprehensive multi-year financial and capital plan and ensure that the Clerk- Treasurer provides adequate financial reports to Trustees.

In response to questions about future fiscal planning Briggs stated there has been preliminary conversation about the use of fund balance. The village anticipates a small public works project later this year, which includes constructing a fence around the village’s reservoir. “We are making adjustments,” Briggs said. “But we are not talking about a lot of money.”

Franklin has two months to detail corrective action to the state, Briggs said. The village of Franklin, Briggs continued, likely has the smallest budget of any municipality in the Southern Tier, with just 200 properties contributing to the tax base. Briggs commended the efforts of current and past governing boards noting its well-kept infrastructure and recent water system upgrade. “There’s really not a lot of fat in the village budget,” he said.

The village of Franklin board of trustees meets the second Monday of the month at 7 p.m., at the Rich Farmhouse Community Center, 574 Main Street, Franklin.

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