(WNY News Now) – Chautauqua County – New York State Comptroller Thomas P. DiNapoli has exposed financial mismanagement in local governments with audits revealing discrepancies in budgeting, financial oversight, and expenditure in North Chautauqua County Water District, as well as irregularities in the disbursements and shared services costs of the Town of Sheridan in Chautauqua County.
Chautauqua County – Financial Condition
The North Chautauqua County Water District (district) board, county legislature and other county officials did not adopt realistic budgets, routinely monitor the district’s financial operations or take appropriate actions to maintain the district’s fiscal stability. Auditors found county officials: overestimated revenues by a total of $1.6 million, an average of $410,000 or 29% each year, from 2019 through 2022; did not enforce collection of water usage billed to Chadwick Bay Intermunicipal Water Works (CBI), resulting in a balance owed of $1.4 million; spent $5.2 million from the general fund for district operations and did not repay the general fund, as required, because the district did not have sufficient funds; and did not thoroughly review budget-to-actual reports and did not prepare cash flow analyses. In addition, the district had a growing negative cash balance totaling over $5 million as of Dec. 31, 2022, was experiencing, on average, $150,000 operating deficits each year, and owed the general fund $5.2 million, plus related interest.
Town of Sheridan – Disbursements (Chautauqua County)
Claims and payroll-related disbursements were not always adequately supported, properly approved or for town purposes. Of the 755 claims totaling $1.2 million auditors reviewed, 225 totaling $590,622 lacked supporting documentation indicating that they were received and for appropriate town purposes; 234 claims totaling $313,112 were not audited or approved by the board; 194 totaling $531,960 lacked supporting documentation and were not audited or approved by the board, and 50 totaling $27,124 were not for a town purpose. In addition, the highway superintendent and a highway employee were paid $12,858 more than the board authorized, and the town clerk was paid an additional $12,775 to perform some of the town supervisor’s financial duties and act as a bookkeeper, which is an incompatible position or duty. Lastly, ten individuals were paid $372,636 to exclusively conduct non-town work related to an intermunicipal agreement, and the former town supervisor was paid $22,500 to supervise these individuals doing the work, all without board approval.
Town of Sheridan – Shared Services Costs (Chautauqua County)
The town was not reimbursed equitably for shared service costs related to an intermunicipal agreement (IMA) that created the Chadwick Bay Intermunicipal Water Works (CBI). Because the board did not monitor the IMA’s operations and labor costs, town taxpayers paid $125,736 to provide services to customers in three other towns and a village. Officials also did not collect about $21,000 from the CBI for town office space the group uses. In addition, the board and former town supervisor donated 6.2 acres of town land to Chautauqua County (county) without conducting a cost-benefit analysis or evaluating whether the conveyance was in the taxpayers’ best financial interest. Although the county installed a water storage tank on the land and installed water lines, there is no existing water district or documented plans to establish a water district near these improvements; therefore, it provides no benefit to town taxpayers.





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