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Jun 28, 2011 6:11 PMPublication: The Southampton Press

New Southampton Town Audit States That Revenues Outpaced Expenses In 2010

Jun 29, 2011 10:03 AM

An independent audit of Southampton Town’s 2010 financial statements depicts a sunnier financial outlook than the previous year, according to a presentation delivered last week by the town’s auditing firm, Nawrocki Smith LLP.

Total revenues topped expenditures last year by about $13.6 million, according to a summary of the report, meaning that the town ended the year with a surplus. In comparison, in 2009, the town’s revenues came up $1.1 million short and failed to cover overall expenses, and the town ended the year with a deficit.

Also, the town’s police fund, which was previously operating with a deficit, has pulled itself out of the red, according to a summary of the audit provided by officials with the Melville-based auditing firm, who delivered a presentation to the Southampton Town Board at a work session last Friday.

The town’s total net assets, meanwhile, increased in value from $618 million in 2009 to $631.6 million last year, primarily due to an increase in Community Preservation Fund money, according to the audit.

The town’s total revenues for 2010 came in at $132.4 million, a 13.7-percent increase over the previous year, according to the audit. That $16 million jump was primarily due to an increase in property tax revenues and operating grants, the audit notes. At the same time, expenses for the year climbed by 1.1 percent, or $1.3 million, to $118.8 million. That bump is attributed to an increase in salaries and employee benefit costs, the document states.

The town’s general fund ended 2010 with a $14 million fund balance, which is an increase of about $2.5 million, or 21.7 percent, compared to 2009, according to the management’s discussion and analysis portion of the report, which was prepared by Town Comptroller Tamara Wright. In her comments, Ms. Wright notes that the town experienced a total governmental operating funds surplus of $5.4 million for 2010, excluding legal settlement proceeds totaling $1.4 million.

Ms. Wright said the town’s overall financial health greatly improved in 2010. “Definitely, we’ve strengthened the town overall,” she said in an interview on Monday.

Still, Ms. Wright said she is concerned that the trend will not hold up this year, particularly with a budget that sets aside no money for deficit reduction in some of the town’s enterprise funds. “It’s a very tight budget, and the board did not want to raise taxes, and we didn’t really raise money toward deficit reduction and fund balance improvement as we did this year,” she said. “I don’t anticipate a surplus this year.”

The town’s fiscal health has been following a relatively upward trajectory recently when compared to accounting mishaps of the past. Nearly two years ago, another audit discovered numerous financial blunders and bookkeeping errors spanning from 2003 to 2007, resulting in millions of dollars in capital projects that were never authorized and properly accounted for, leading to an artificially inflated balance in the town’s general fund.

Nawrocki Smith LLP officials also discussed on Friday the results of an internal control readiness study, which offered approximately 110 recommendations on how to improve the town’s overall fiscal security. Ms. Wright said many of those recommendations have already been implemented or will be addressed in the future.

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