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Audit: Silver Creek overspent on water, sewer projects

SILVER CREEK — The Silver Creek Village Board’s handling of finances for the sewer and water capital projects has come under scrutiny.

In an audit of the village’s capital projects, state Comptroller Thomas DiNapoli’s office said the village has failed to develop a long-term plan that evaluated each project’s financial impact on the annual operating budget. The sewer fund did not have sufficient cash to pay $296,000 of new debt service costs.

In addition, the board did not approve water capital project change orders, which resulted in the project’s budget being overspent by $179,000 (5 percent). As a result, there will be limited cash for water operations and unrestricted fund balance in the water fund will be significantly reduced.

“The sewer fund had to borrow approximately $293,000 from the general fund and the loan has not been repaid because the sewer fund’s financial condition has deteriorated,” the audit reports. “Unless these problems are addressed, future operations could be adversely impacted.”

In its response to the report, village Mayor Nick Piccolo said his board agrees with the recommendations offered by DiNapoli’s office. They include:

≤ Develop a long-term financial plan that addresses capital projects and revise the plan as needed.

≤ Ensure that the sewer fund budget includes adequate debt service appropriations.

≤ Develop a plan to eliminate the deficit fund balance in the sewer fund and to repay the general fund in a timely manner.

≤ Develop written policies and procedures for the oversight and management of capital project finances that include a formal process for approving change orders and monitoring project costs.

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