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DiNapoli: City of Lockport Could Soon Run Out of Money

Lockport, NY (WBEN) The state's top fiscal watchdog warns the city of Lockport will soon run out of money unless it secures new financing or drastically cuts expenditures.

Tom DiNapoli released findings of his audit on the city, saying his auditors found not only that Lockport will soon run out of cash, but that the city’s cash-flow deficiency will grow to nearly $4.6 million by Dec. 31. “The city of Lockport’s accounting records are in such poor condition that city officials were in the dark about the true severity of their fiscal problems,” DiNapoli said. “Now, Lockport has to make some difficult choices to address its financial woes. City officials need to get a handle on the city’s finances immediately and create a multiyear financial plan with budgets that only spend what the city takes in.”

Auditors found the city’s treasurer failed to maintain accurate accounting records or prepare an adequate cash-flow analysis. The city’s audited financial statements for the fiscal year ending Dec. 31, 2012 included account balances that were materially misstated, leaving the city council and the mayor’s office without reliable financial information that would have alerted them to the impending financial crisis.

DiNapoli recommended the city treasurer and council:
·        Ensure that the city’s accounting records are complete, accurate and maintained in a timely manner so that the council and city officials can properly assess the magnitude of the city’s fiscal problems and subsequently monitor financial activity;
·        Prepare adequate cash-flow analyses and provide them to the council for review;
·        Develop a multiyear fiscal plan that builds a cash balance sufficient to eliminate the need for significant short-term cash flow borrowing; and
·        Adopt structurally balanced budgets that rely on recurring revenues to fund recurring expenditures.
DiNapoli says city officials agreed with the audit and have begun taking steps to correct the problems

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Topics : Business_Finance
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Locations : Lockport
People : Tom DiNapoli