LONG LAKE - An audit of the Town of Long Lake’s capital projects turned up a surprise: officials never closed out the project created to close the town dump, which has a cash balance of $111,373; and four capital project reserve funds were not approved by the state.
The dump closure capital project was open but not active. The project was completed in 2000.
“Town officials were aware the project had unspent funds remaining,” the audit by the Office of the State Comptroller says. “However, they indicated they did not close the project because they did not have time to research the original source of these funds in which to return the moneys.”
The OSC determined that all six capital projects open as of Dec. 31, 2011 were approved and accounted for. Revenues were posted to the correct projects and a sample review of expenditures found funds were expended as authorized by the Long Lake Town Board and the proper capital projects were charged.
The OSC reviewed the following reserves with corresponding balances as of July 31, 2012: Dock Repair Reserve $77,500; Highway Equipment Reserve $88,135; Highway Garage Repair Reserve $98,945; and X-Ray Reserve $83,754.
The audit found town officials did not get OSC’s approval before establishing the four reserve funds, and there is no documentation that the board formally established the highway equipment reserve fund.
The OSC must approve the establishment of the town’s capital reserve funds because state lands make up more than 30 percent of the town’s total taxable assessed value.
TOO MUCH MONEY
Two of the reserve funds exceeded the amount the board authorized by a total of $101,445.
For example, the board-authorized amount for the dock repair reserve was $45,000; however, it had a balance of $77,500, $32,500 more than authorized.
Similarly, the board-authorized amount for the highway garage repair reserve was $30,000; however, it was $68,945 more than authorized.
The audit also found the board authorized three interfund transfers to these reserves totaling $42,590 but made no expenditures from them over the past two years. “As such, we question whether these reserves are necessary,” the audit says.
“Allowing $111,373 to remain in a capital project that has been completed for approximately 12 years and reserves to exceed the maximum authorized amounts by $101,445 has prevented the town from using these moneys to fund other needed projects or reduce taxes,” the audit concludes.
Town Supervisor Clark Seaman responded to the audit in a letter dated Feb. 4, saying, “We agree the findings are factually correct and we are going to take appropriate steps to rectify the problem.”