FEBRUARY 1, 2006 FARMINGVILLE, NY – Brookhaven Town Supervisor Brian X. Foley today announced that his Team continues to uncover a disturbing trail of financial mismanagement; most recently finding more than $2 million worth of transfers out of the retirement system budget account to cover over-expenditures in a myriad of 2005 budget lines. Now $2.13 million of Town surplus funding must be appropriated to plug the massive budget hole created by these transfers.
In addition, if the Town had made the annual payment to the State’s retirement system by December 15, 2005 (which it did not, but had regularly done so in the past) it would have been able to take advantage of the “pre-pay” discount; saving $58,834 which now must be paid.
“The days of ‘spend now, pay later’ are over,” said Foley. “We are cleaning up this government, managing this budget and saving taxpayer dollars.”
In total, over 134 line item transfers were made out of the general fund retirement account, only three of those transfers were approved by the Town Council. The Town’s budgetary transfer policy, which is a sound policy and is approved annually by the Town Council, allows the Commissioner of Finance to approve transfers of less than $15,000 without other authorization. Transfers of amounts from $15,000 up to $30,000 require the Supervisor’s approval. Transfers of more than $30,000 require Town Council authorization. Eighty-nine of the one hundred and thirty-four transfers made out of the general fund retirement account in 2005 were for exactly $15,000 and written approval from the Supervisor as required by the Town policy has not been located.
“Scrutiny was avoided by making numerous small transfers,” said Foley. “The retirement budget line was raided to pay for over expenditure after over-expenditure with no regard for ability to pay the bill in the end. The Supervisor and the Board must have oversight over the departments or fiscal mismanagement can ensue.”
PLAN OF ACTION
The Foley Administration has a plan of action to proactively and properly address this retirement system budget shortfall:
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Pay 2005 Retirement System Bill before February 1st, 2006 and avoid paying $1,365 in interest charges per day the payment is late.
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Adopt Town Board Resolution Appropriating 2005 undesignated fund balance in the amount of $2,127,871 to cover the gap created by budget transfers out of the appropriation line.
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Make accounting adjustments to appropriately show 2005 & 2006 expenditures where they occurred, as recommended by the Towns' independent auditors.
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Implement new fiscal policies and procedures to provide greater fiscal oversight, improved checks and balances and transparencies in financial accounting.
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Office of the Supervisor
One Independence Hill • Farmingville • NY 11738 • Phone (631) 451-6955 • Fax (631) 451-6677
www.Brookhaven.org