New York Comptroller Thomas DiNapoli issued a press release this morning to all New York media outlets regarding an audit of Rockland County. Read below:
POOR BUDGET PRACTICES HURTING ROCKLAND COUNTY
County Has Incurred Large Debt and General Fund Deficit
Budgeting practices by Rockland County have left it with an accumulated deficit of more than $50 million and hundreds of millions in debt, according to an audit released today by New York State Comptroller Thomas P. DiNapoli.
“Since 2006, Rockland County has seen its deficit skyrocket for several reasons, including overly optimistic revenue projections, failing to repay advances of general fund monies to other county funds and the loss of a major property tax case,” DiNapoli said. “County officials need to make some hard decisions to put together a real budget to get out of this mess. Rockland needs to live within its means for the sake of county taxpayers.”
The county’s general fund total year-end balance dropped from $23.3 million on Dec. 31, 2008 to a deficit of $3.9 million for 2010. Because there was a $52 million deficit in the unappropriated fund balance for 2010, the county’s $48 million in reserves are unfunded.
DiNapoli’s auditors, who reviewed the results of operations for fiscal years 2006 through 2009, found the county’s budgeting practice of overestimating revenue necessitated tens of millions of cash advances between operating funds that were not repaid. Sales and mortgage tax revenues were overestimated by more than $70 million during the audit period.
In addition, the county’s nursing home had operating deficits in all five years covered by the audit, an accumulated deficit that now totals more than $86 million. The county also has had to write-off more than $20 million in unpaid real property taxes and penalties owed by a major taxpayer.
The county was hurt by delayed state aid payments, averaging more than $38 million in each of the fiscal years 2006 through 2010. Because these payments were not received until after 60 days following the county’s fiscal year end, the county could not use those moneys for the budgeted years and had to issue short-term debt.
Rockland issued $343 million in debt in 2007 and $100 million or more each year from 2008 to 2011. The county also prematurely budgeted $17.8 million in revenues for 2011 from the planned sale of its nursing home and medical facility, operated under the home and infirmary fund, to a proposed public benefit corporation (PBC) to be established with state approval.
As of August 2011, the state legislature had not granted the requested approval for establishing a PBC, and the county had to issue a $17.8 million deficiency note for which the taxpayers are liable next fiscal year.
DiNapoli’s auditors called on the county to:
· Evaluate the operations of its key operating funds and develop a comprehensive plan to address the operating deficits;
· Ensure that advances from the general fund are repaid in a timely manner;
· Realistically budget for sales and mortgage tax revenues or reduce general fund expenditures to levels that can be financed by recurring revenue sources;
· Include in the budget only the revenue from state aid that will be available within the fiscal year or within 60 days after the fiscal year end; and
· Obtain a valuation of the facilities and operations of the home and infirmary fund and develop a realistic financial plan to either divest the facilities or make them financially viable.
County officials generally agreed with the audit’s findings and said they have begun taking steps to correct the county’s financial problems.
A copy of the audit can be found here: http://www.osc.state.ny.us/localgov/audits/counties/2011/rockland.pdf