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Audit Objective

Determine whether the Town Board (Board) effectively managed the Town of Locke’s (Town’s) financial condition.

Key Findings

The Board did not effectively manage the Town’s financial condition. As a result, it levied more taxes than necessary to sustain operations.

• The Board did not adopt budgets with sound estimates, nor did it monitor budgetary results during the year.
• Unrestricted fund balances as of December 31, 2019 in the general and highway funds and water district were excessive, ranging from 89 percent to 536 percent of actual expenditures.
• The Board did not adopt formal fund balance, reserve and budgeting policies, along with multiyear financial and capital plans.

Key Recommendations

• Include more realistic estimates of revenues and expenditures when developing and adopting the annual budgets.
• Use surplus funds as a financing source for funding one-time expenditures, needed reserves and/or reducing property taxes.
• Establish budgeting, fund balance and reserve policies and develop multiyear financial and capital plans.

Town officials generally agreed with our findings and indicated they plan to initiate corrective action. Appendix B includes our comment on an issue Town officials raised in their response.