MAKE TRANSPARENCY YOUR 2025 RESOLUTION
The Office of the State Comptroller (OSC) encourages fiscal responsibility, stewardship, and transparency at all levels of government, from state agencies to local governments. To that end, we post information that local governments are required by law to report to us in their Annual Financial Reports (AFRs) on our Open Book New York website. We also use AFR data to compute municipalities’ and school districts’ Fiscal Stress Monitoring System (FSMS) scores, checking for early signs of budgetary challenges.
Yet, more and more municipalities and fire districts are failing to file their AFRs on a timely basis. Keep reading to find out more about how OSC is closely monitoring this concerning trend through a new webpage and recent audits.
NEW AFR NON-FILERS WEBPAGE
The number of persistent non-filers (delinquent for three years or more) has more than doubled over the past five years. The AFR captures the local government’s financial information for the year, which informs local officials, residents, other taxpayers, and State policymakers about the financial condition of local governments. Filing several weeks late means information is delayed getting to the public on OSC’s website. FSMS scores are calculated using AFR data to provide an early alert to local government officials to any budgetary issues they may face. Filing several months late can mean that a municipality will not receive a fiscal stress score.
To inform New Yorkers about the importance of filing to transparency, accountability and effective financial management, OSC has set up a new AFR Non-Filers webpage and AFR Filing Status Tracker. Taxpayers will also be able to check their local governments’ current filing status. This new webpage also includes help for local officials who need assistance filing their reports.
VILLAGE TRANSPARENCY REPORT ISSUEDOSC recently examined 30 villages to test for compliance with AFR filing and other transparency requirements. The report, issued in December, showed that 25 of the 30 selected villages did not file their AFR for fiscal year 2023, four filed their report significantly late (an average of 331 days), and only one filed within the time period prescribed by law. In addition, auditors found that 21 of the selected villages failed to maintain complete and up-to-date accounting records. Failure to file by the statutory deadline or not filing can raise questions about the financial standing of a village as well as the general effectiveness of its management, and can leave residents, policymakers and other interested parties without information regarding the fiscal performance of their government.
SCHOOL DISTRICT AUDITS IDENTIFIED MILLIONS IN EXCESS RESERVE FUNDS IN 2024New York State Real Property Tax Law Section 1318 limits the amount of surplus funds that a school district can retain to no more than 4 percent of the budget. And while school districts are generally not limited to the amount of funds that can be held in reserves, OSC recommends these balances be kept to reasonable levels. Yet, in 2024, OSC audits identified several school districts that maintained excess surplus fund balance and excess reserve funds, which can result in a tax levy that is higher than needed to finance school district expenditures. In 2024, LGSA released 73 audit reports on school districts, covering a variety of audit objectives. Sixteen of these reports (22 percent) included findings of excess surplus fund balance. Further, 14 of these school district audits were found to have excess reserve funds totaling more than $112.5 million. Our audit reports made several recommendations to help school district officials improve their financial management practices and increase their transparency to taxpayers. These recommendations included developing and adopting reasonable budgets, reserve policies, and plans to reduce surplus fund balances to allowable limits; increasing communication with taxpayers; and periodically reviewing reserve balances for reasonableness. OSC’s publications on reserves provide guidance on establishing and maintaining reserve funds.
NEW LAW MAKES IT EASIER FOR COMPTROLLER TO RETURN LOST MONEYComptroller DiNapoli presents Mayor William Boland an unclaimed funds check for the City of Corning.
OSC’s Office of Unclaimed Funds (OUF) is charged with returning $19 billion in lost funds to its rightful owners. These funds could be from dormant bank accounts, security deposits, insurance benefits and other sources for individuals, businesses, and local governments. Each business day OUF returns an average of $1.5 million to those who file claims, including to local governments and school districts. Newly enacted legislation (Chapter 498 of the Laws of 2024), initiated by OSC, will allow OUF to expedite the payment of unclaimed funds under a certain monetary threshold. Beginning in 2025, OUF will be able to proactively pay up to $250 in unclaimed funds to its rightful owner after verification. Filing a claim to retrieve your lost money is free. Click the link below to search to see if your local government has unclaimed funds with OUF.
FISCAL STRESS RESULTS FOR SCHOOL DISTRICTSTwenty-two school districts were designated in some level of fiscal stress for the school year (SY) ending June 30, 2024, up from 16 districts in fiscal stress the prior year. The low number of districts designated in stress reflects in part recent increases in state and federal aid. State and federal aid grew 42 percent from SY 2019-20 to 2023-24, increasing more than $6.5 billion from $15.6 billion to $22.1 billion (and accounting for 40 percent of total revenues). A significant portion of the federal aid school districts received in these years consisted of pandemic-related funding. Of the 670 school districts that filed their financial reports in time to be scored, just 3.3 percent have been designated as being in a level of fiscal stress.
IMPORTANT REMINDERS- Don’t forget to file your Property Tax Cap (PTC) and Constitutional Tax Limit (CTL) forms. For local governments, the PTC form is due prior to adopting the final budget; for school districts, the PTC form is due on or before March 1st. The CTL form for counties, cities and villages is due at least 10 days prior to adopting the final budget.
- Don’t forget to file your AFR. Check out OSC’s interactive table online for your AFR filing deadline. Need an extension? Extension requests can now be submitted through the new AFR system.
- OSC recently released a new system for maintaining municipal contact information and ensuring important OSC communications are received in a timely manner and by the current local government officials. Chief Financial Officers (CFOs) and Municipal Clerks should log in to their OSC Online Services account to update and/or confirm their municipal official contact records. You can find more information about this system here. Note: this system affects counties, cities, towns, villages, fire districts and libraries.
 | | TRAINING EVENTSFROM THE ACADEMY FOR NEW YORKSTATE'S LOCAL OFFICIALS |
Training for the New York State City/County Management Association (NYSCMA)In November, we welcomed the New York State City/County Management Association to our main office in Albany for a training seminar. The topics covered in this half-day informative program included local government cybersecurity, audits of local governments, a retirement overview and an overview of our available data resources. If your organization would like to participate in a similar event, please contact us at (518) 474-4037 or submit a request for training. 
In addition to OSC’s own training events and webinars, our Academy webpage now has a link to some online courses and resources that may be of interest to local officials wishing to improve their knowledge base. |
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