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a $10,000 transfer from the same reserve account to again be used toward operating expenditures. Without this transfer the sewer fund would not have been able to meet its May 2017 obligations totaling approximately $24,000. Because the Board did not adopt realistic budgets, the sewer fund incurred operating deficits and a decline in its overall financial health. However, with rate increases in effect and the adoption of more realistic revenue estimates in 2018- 19 and 2019-20, there has been marked improvement. To sustain the gains in fund balance levels over the last two years, the Board should continue to monitor the operations of the sewer fund by annually reviewing the need for rate increases and revising cost allocations based on historical trends. What Do We Recommend? The Board should: 1. Continue to adopt budgets that include reasonable revenue estimates. 2. Review rates and contractual revenues annually and revise as necessary to generate sufficient revenue to cover expenditures. 3. Document its rationale for shared service cost percentages and periodically evaluate these calculations to accurately reflect actual costs and ensure that all funds are paying their proportionate share. 4. Consult with legal counsel as needed and investigate all transfers from reserves and return any funds used improperly. Of f ic e of t he New York State Comptroller 7