Drescher and Malecki’s audit of Dunkirk’s finances for 2023 has more of the same criticisms that filled the ’21 and ’22 audits. The statement of findings section paints a picture of a confused, informal, poorly monitored city financial system.

The first page of the section flatly states, “The city does not have or does not follow formal policies and procedures documented for critical accounting cycles. … As a result, journal entries posted to the accounting system and bank reconciliations were not consistently reviewed by an employee independent from the preparer.”

Additionally, “Accounts payable is not reviewed or reconciled to amounts actually owed to vendors on a regular basis.”

The statement of findings goes on to hit Dunkirk for its deteriorating fund balance. It cites a fund balance that plummeted from $5,847,506 as of Jan. 1, 2019, to a deficit of $6,301,023 on Dec. 31, 2023.

It didn’t help matters that Dunkirk spent $9,999,623 more than its total revenues in 2019. The excess of expenditures over revenues was about $6.4 million in 2020, $1.6 million in 2021, and around $2.6 million for both 2022 and 2022.

Drescher and Malecki go on to state that the issues surrounding the city’s accounting led to an inability to monitor cash position. Due to that, “short and long-term financial planning and budgeting (is) incredibly difficult.”

Meanwhile, the city’s wastewater, water, capital projects, and grant funds “borrowed significantly from the general fund,” although spending in the funds wasn’t adequately maintained to ensure repayment.

All of this means “overall financial performance of the city has deteriorated at an alarming pace.” It’s noted that the city wound up needing two Revenue Anticipation Notes. The latest one, issued in July 2024 for $12,731,707, is due July 24.

The audit also notes the state Legislature’s Fiscal Recovery Act of 2024, which authorizes up to $18.5 million in bonds to help the city out — once the state Comptroller’s Office certifies the city’s debt. That hasn’t happened yet. The 2023 audit, which the city quietly received in the last week of April, is a key part of the certification process.

Among other subsequent events, the city Treasurer’s Office was the subject of a police investigation in March, though no updates have come out on that. Also, the treasurer position could be abolished this Election Day after the Common Council approved a referendum to do so back in April.

Fiscal Affairs Officer Ellen Luczkowiak, who started her job in 2024, successfully pushed for reform of financial recordkeeping through a new computer interface that all city departments can use. That’s going to be put in place this year.

The 2023 audit of Dunkirk’s finances can be viewed on the city website, along with audits from previous years. Here’s a grab bag of more bad news from the 2023 edition:

— Revenues for 2023 went down 7.6% from 2022 — but expenses went up 11.4%, “due to increased costs associated with allocable employee benefits.”

— The city’s general fund took in $834,769 less than what was budgeted for 2023, and expenditures were $1,125,892 over budget, for an “unfavorable variance” of $1,960,661.

— Dunkirk did not properly report revenue within federally required quarterly reports on its use of COVID-19 epidemic recovery funds.

— When 2022 ended, Dunkirk’s finances were in such poor shape that it did not have cash on hand to cover checks written to vendors.