An audit by the New York State Comptroller’s Office has uncovered significant issues with procurement and budgeting practices in the Town of Gorham, Ontario County. The audits, issued on June 28, 2024, found that town officials failed to adhere to established policies and statutory requirements, potentially leading to unnecessary expenses and improper budgeting.
Procurement Audit Findings
The procurement audit (2024M-7) aimed to determine whether town officials procured goods and services in accordance with town policy, statutory requirements, and good business practices. Key findings from the audit highlighted several discrepancies:
- Out of 65 purchases totaling $2.5 million, 16 purchases worth $468,738 were not competitively bid.
- Town officials did not comply with purchasing policy requirements for 41 purchases totaling $1.4 million.
- All nine professional services vendors, totaling $1.1 million, were hired without seeking competitive bids, and two lacked written agreements.
- Of 116 credit card purchases totaling $29,562, 12 purchases amounting to $3,736 did not have adequate supporting documentation.
These practices increase the risk that the town paid more than necessary for goods and services or made purchases not intended for town purposes.
The audit recommended that the town:
- Comply with competitive bidding laws and the town’s purchasing policy requirements.
- Develop written procedures for situations like professional services where a request for proposals might be appropriate.
- Ensure credit card purchases are properly supported and align with town policies.
Town officials agreed with the findings and have indicated plans to take corrective actions.
Budgeting Audit Findings
The budgeting audit (2023M-181) focused on whether the Town Board adopted realistic budgets. The audit revealed that the board failed to develop realistic budgets, a financial plan, or fund balance and reserve policies. Consequently, the town maintained unreasonable fund balance levels and likely levied more taxes than necessary. Key findings include:
- From 2020 to 2022, the town generated $1.6 million in operating surpluses across various funds.
- In 2021, $230,000 in sales tax revenues were incorrectly recorded in the town-wide funds instead of the town-outside-village funds, despite property taxes being levied in the latter.
- An excessive $1.5 million of unrestricted fund balance was maintained in the town-wide general fund as of December 31, 2022.
- Budget transfers were made at year-end rather than as necessary throughout the fiscal year, resulting in over-expended appropriation accounts.
The audit recommended that the town:
- Use historical trends and other known factors to develop more accurate revenue and expenditure estimates.
- Develop a plan to reduce excessive unrestricted fund balance in a way that benefits taxpayers.
- Make timely budget transfers to prevent over-expending budget line items.
Town officials have agreed with these findings and plan to implement corrective actions.
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