LOCKPORT, N.Y. (WIVB) – There is a severe cash flow problem in the City of Lockport, according to New York State Comptroller Thomas DiNapoli.
Auditors found that not only will Lockport run out of cash soon, but the cash-flow deficiency will grow to $4.6 million by the end of this year.
“The City of Lockport’s accounting records are in such poor condition that city officials were in the dark about the true severity of their fiscal problems,” DiNapoli said. “Now, Lockport has to make some difficult choices to address its financial woes. City officials need to get a handle on the city’s finances immediately and create a multiyear financial plan with budgets that only spend what the city takes in.”
DiNapoli says the problem was caused by poor record keeping and a reliance on fund balance to finance operations.
DiNapoli recommended the city treasurer and council:
- Ensure that the city’s accounting records are complete, accurate and maintained in a timely manner so that the council and city officials can properly assess the magnitude of the city’s fiscal problems and subsequently monitor financial activity;
- Prepare adequate cash-flow analyses and provide them to the council for review;
- Develop a multiyear fiscal plan that builds a cash balance sufficient to eliminate the need for significant short-term cash flow borrowing; and
- Adopt structurally balanced budgets that rely on recurring revenues to fund recurring expenditures.