ALBANY — A scathing audit from state Comptroller Thomas DiNapoli has found that from 2017 to 2019 the North Tonawanda mayor and Common Council "did not adopt structurally balanced budgets" and did not "properly monitor the city’s financial operations or take appropriate actions to maintain the city’s fiscal stability."
Among its key findings, the audit noted that the city's general fund and sewer fund experienced operating deficits from 2017 through 2019, and that despite the city’s deteriorating financial condition, officials did not establish a fund balance policy, multi-year financial plan or capital plan.
The audit also criticized Mayor Arthur Pappas and the council’s budgeting practices and "poor financial management," which have left the city in a "vulnerable financial position."
State auditors examined the city's books from Jan. 1, 2017 through April 27. Auditors said they were looking to determine whether the mayor and council adopted realistic budgets that were structurally balanced, routinely monitored financial operations and took appropriate actions to maintain the city’s fiscal stability.
The audit period covered much of the tenure of North Tonawanda's former city accountant, Amanda Reimer. While working for the city, Reimer was known to be an advocate for making substantial changes to the city's fiscal practices.
In October 2018, Reimer criticized the city's decision to continue working with its longtime outsider auditor, Amato Fox and Company. She charged that audits from Amato Fox were prone to "performance errors."
North Tonawanda Alderman-at-Large Austin Tylec suggested Friday night that had his colleagues heeded Reimer's call, the state audit may have turned out better.
"Maybe if we had a different auditor, things might have been different," he said. "I'm grateful for the comptroller's audit."
North Tonawanda continues to use Amato Fox, now known as Tette, Ingersoll and Co., to perform its audits.
Tylec also questioned the impact of the city having four different clerk-treasurers in a five-year period.
"It's our responsibility to make sure we're fiscally responsible," Tylec said. "(The audit) is a learning tool and we have a lot of work to do."
In their recommendations, the state auditors called on the city to "take appropriate action to remedy the financial condition problems affecting the city, adopt structurally balanced budgets that include realistic estimates (and) closely monitor finances to prevent further decline in financial condition."
DiNapoli's team said "city officials agreed with our recommendations and indicated they planned to initiate corrective action."
Calls to Pappas seeking comment on the audit were not immediately returned.
However, in a letter to DiNapoli, included in the audit report, Pappas acknowledges the city's financial shortcomings.
"We acknowledge that throughout the years covered in the audit, there were various budgetary practices that need to be improved," Pappas wrote.