Lockport Union-Sun & Journal — Poor accounting and budgeting practices are two major reasons for Lockport’s fiscal stress, according to an audit report released Friday by the New York State Comptroller’s Office.
In the report, auditors claim city officials did not use realistic estimates in developing the 2013 budget. Revenues were overly optimistic, resulting in operating deficits, auditors reported.
And during the year as a cash flow problem occurred, analysis was not being done routinely to foresee the problem, the auditors said. The city ended up borrowing $2.7 million to cover expenses through the end of this year.
It didn’t help that city officials were not working with accurate numbers. The Treasurer’s Office did not properly record or report the city’s financial position, the audit report charged.
If it had, it is very likely that city officials would have been aware of the city’s declining financial condition and could have taken corrective action sooner, auditors said.
The report was a result of the Comptroller’s Office sending auditors to Lockport after the city was designated as a municipality in “moderate fiscal stress” this past September. The audit took a look at finances from Jan. 1, 2012, through Oct. 9 of this year.
City officials worked closely with the auditors, so the contents of the audit report are not a surprise to them.
”There are things we can do better,” Mayor Michael W. Tucker said. “I take it as constructive criticism. We’re moderately stressed, we’re not on the verge of a control board or bankruptcy. But this is a red flag ... we take these findings seriously.”
Common Council President Anne McCaffrey, 2nd Ward alderman, said the Council is committed to making changes and getting the city back on financially solid ground.
Heightened monitoring of the city’s finances is a common theme in the audit report, so the Council will stay on top of the budget, McCaffrey said.