Village of Hewlett Neck – Financial Management (2022M-35)

Issued Date
July 08, 2022

[read complete report - pdf]

Audit Objective

Determine whether the Village of Hewlett Neck (Village) Board of Trustees (Board) adopted realistic budgets, and monitored and effectively managed fund balance.

Key Findings

The Board did not adopt realistic budgets, or monitor and effectively manage fund balance. The Board:

  • Adopted budgets that were not based on historical revenue and expenditure trends. Revenues were underestimated by a total of $334,095 and appropriations were overestimated by a total of $171,095 from 2017-18 through 2020-21. As a result of the Village officials’ budgeting practices, officials collected a four-year total of $505,187 more than necessary in taxes.
  • Maintained an excessive level of surplus fund balance in the general fund from 2017-18 through 2020-21 ranging between $364,415 in 2017-18 (100 percent of the ensuing year’s budget), and $445,858 in 2019-20 (109 percent of the ensuing year’s budget).

Key Recommendations

The Board should:

  • Adopt realistic budgets based on historical trends and known plans for the fiscal year.
  • Reduce surplus fund balance to a reasonable amount by using it to fund needed reserves and reducing the tax levy.

Village officials agreed with our recommendations and indicated they have initiated corrective action.