October 5, 2013

Keeseville audit faults accounting

By LOHR McKINSTRY Press-Republican

---- — KEESEVILLE — A state audit of Village of Keeseville finances from 2010 to this year says accounting errors understated finances and put the municipality in fiscal danger.

Village Mayor Dale Holderman said the errors were made by the previous administration and have since been corrected.

The mayor said he and the Village Board concurred with the findings in the audit conducted by the Office of the State Comptroller.

“I was happy with the audit,” the mayor said in an interview Tuesday. “We’re doing things right. We’re back on track where we need to be.”


He said their goal is a zero deficit at the end of the current financial year.

“Everybody is on the same page now to get things done correctly the way they’re supposed to get done. We have a large surplus because we watch our pennies closely.

“We want to get the village on good financial footing. We want to be fiscally responsible with taxpayers’ money.”

In the interview, Holderman said the audit made it seem as though Village Clerk-Treasurer Lynn Hathaway was responsible for the errors, when in fact she was just doing what she was directed to do by the previous village administration.

“Lynn did everything she could. She made annotations on the paperwork. She steered them (auditors) right to it. We had previously fixed a bunch of stuff (errors).”


Holderman said he did not want to point fingers at the previous mayor, Megan Rock, for any problems. Rock has since left the area.

The audit did not find any intent by anyone to defraud and no money was found missing.

Holderman said the auditor worked with Hathaway to correct the bookkeeping entries that were wrong.

The mayor said the suggestion that they needed a multi-year financial plan is likely moot, because earlier this year voters approved dissolution of the village effective Dec. 31, 2014.

There is an additional public referendum set for noon to 9 p.m. Tuesday, Oct. 22, on the dissolution plan itself. If residents reject it, the village will stay in existence, according to state law.

“Should circumstances change, we will endeavor to develop such a (financial) plan,” the mayor told the state in his letter.


The reports says the village had a deficit for 2011-12 but was unaware of it.

“The recorded total fund balance for the general, sewer and water funds at the end of the last three fiscal years were either overstated or understated due to various accounting errors,” the audit says. 

“As a result, the clerk-treasurer and the board were not aware of the general, sewer or water funds’ actual operating results and overall financial condition.”

That meant accurate operating budgets were not adopted, the report said, and financial operations were not adequately monitored as a result.

An inter-fund loan of $20,000 had to be made to the sewer account for 2012-13 to avoid having to borrow money or issue a bond, the audit says.

“The sewer rates did not generate sufficient revenues to cover the costs incurred, resulting in the sewer fund having a total fund balance deficit of $35,029 (for 2012-13),” the audit says. 

“In addition, our review of the village’s 2013-14 budget for the sewer fund found that although the board has increased sewer rates, it underestimated expenditures, which will likely offset the additional revenues that are generated.”


The village will take whatever steps are necessary to stabilize the sewer account, Holderman said.

Other than the sewer fund, the situation has since improved, the audit says, so that future village budgets look good.

“Our review of the village’s 2013-14 adopted budgets found that the budgeted revenues and appropriations were reasonable for both the general and water funds. 

“As a result, barring any unforeseen circumstances, the financial condition of the general fund and water fund should remain healthy during the 2013-14 fiscal year.”

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