A state audit has revealed the Town of Oxford’s finances have been mismanaged, with records of the general fund reportedly incomplete or inaccurate.
The review, conducted by the Office of the New York State Comptroller and released in July, claims the Town of Oxford’s current and former supervisors did not maintain complete and accurate financial records and reports. Oxford’s Town Board also allegedly did not provide appropriate oversight by reviewing records, such as fund balance levels or other balance sheet details.
This oversight, according to the report, resulted in the town accruing a $206,637 fund balance deficit by the start of 2024.
The board additionally appropriated $315,279 of nonexistent funds in the 2019 through 2023 fiscal years and used $350,000 in government-issued loans to address cash flow issues. This caused the town to incur $11,430 in borrowing costs.
In a letter to the Office of the New York State Comptroller from July 15, Davis said the town “agrees in general” with the auditor’s findings and will begin “working on a corrective action plan.”
“We as a board strive to do what is best for the town while also being aware of the rising cost of taxes and the cost of living,” Davis wrote.
Here’s what we know.
Audit specifics: Mismanagement, limited oversight
Oxford was first audited in 2017. In that initial report, the state identified that certain budgets relied on fund balance to fund recurring expenditures and insufficient financial information had been provided to the town board.
With this more recent look at the town’s finances, the state stretched the scope of their investigation back to Dec. 31, 2007, and forward through Dec. 31, 2024.
Within this 17-year span, the town-wide fund balance steadily decreased from its peak in 2007 of $479,457. By 2017, the fund balance was in the negatives, increasing to a combined deficit of $206,637 in 2023.
The report predicts that because of the board’s tendency to adopt budgets that were “not structurally balanced,” the town’s financial problems likely worsened in 2024.
In the 2017 audit, the office of the comptroller warned officials in Oxford that using the fund balance to finance recurring expenditures “caused operating deficits, which are often precursors to cash flow problems.” Despite the warning, this practice continued.
Another significant issue highlighted in the report was the current and former town supervisors’ alleged mismanagement of money. In comparisons of the budget to the actual reports, there were numerous transaction errors stemming from manual entry mistakes and omissions.
From 2019 to 2023, Town of Oxford supervisors overstated revenues by $1.1 million and overstated expenditures by approximately $568,000 in the budget-to-actual reports for the main operating funds.
How Oxford will ‘minimize issues’ going forward
In response to the auditors, Oxford Town Supervisor Alan Davis said he thought his ledger spreadsheet served as “a sufficient bank reconciliation,” and he did not consider that some revenues and expenditures could be missing from the budget-to-actual reports that he provided to the town board.
The report found that in addition to the mismanagement of money, borrowing of funding and refusal to implement recommendations from a previous audit, town officials also did not develop long-term financial or capital plans for the municipality.
The Town of Oxford Highway Department reportedly had three vehicles and one piece of equipment that were at or beyond their usable life by an average of nearly four years. Despite this issue, no funds were set aside through reserves for purchasing equipment and vehicles.
On Aug. 4, Davis said in an email that these mistakes were “not done intentionally to hide anything from the town board or the taxpayers” and that human error caused “some data entry mistakes and some income/expenses were not categorized properly according to the Comptroller.”
“Moving forward, we will work on following the comptroller’s recommendations to minimize issues found,” Davis said.
This article originally appeared on Binghamton Press & Sun-Bulletin: NY audit finds fund balance mismanagement, deficit in Town of Oxford
Reporting by Jillian McCarthy, Binghamton Press & Sun Bulletin / Binghamton Press & Sun-Bulletin
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