Community may have to dig deeper into budget reserve

Civic association plans to meet soon on bookkeeping error


November 21, 1999|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

It's back to the drawing board for Crofton Civic Association Board members.

They have called a special budget meeting in two weeks because of a bookkeeping error that probably will cause the community to dig further into reserve funds to cover its spending.

Board President Gayle Sears first noted the error -- surplus funds that were mistakenly added to the budget pool as income -- when she reviewed the $916,440 proposed fiscal 2001 budget, which members voted last week to send to the community for approval. The 2000 budget contains the same error.

The proposed budget would fund an increase in the part-time work hours for town Comptroller Jane Tramby and a 2 percent cost-of-living adjustment for tax district employees next fiscal year. The board also approved a revised budget for this fiscal year that allows the community to buy a police cruiser.

The 2000 and 2001 budgets are to be sent to residents within the tax district as part of the December mailing of the town's quarterly newsletter. The community is to vote on both at a general membership meeting Jan. 10.

The problem is in accounting for a line item called "estimated [current year] budget surplus." The money -- $5,000 in the 2000 budget and $7,000 in the 2001 budget -- represents savings for each fiscal year. They are amounts Town Manager Barbara Swann expects the community won't spend during that budget cycle.

That item should be carried over to the next year's budget as surplus funds. Instead, it was mistakenly counted as income, inflating each budget's total. If the community spent what was budgeted, there would be a shortfall.

Board members will have to decide how to come up with the money that they thought was there. Sears said they probably will pull the money from reserve funds, which were tapped to cover about $17,500, nearly 2 percent of the 2001 budget.

"The budget is technically out of balance," said Sears. "We don't have the income we thought we had, which means the reserve funds are decreasing."

Sears has expressed concern about the reserve accounts because the community annually spends about $87,000 more than is collected in taxes. Employee salaries, which are the largest single item in the budget, drive that figure higher each year.

Swann, who has worked for the town since the 1970s, said the budget has routinely included a current year surplus as income since the 1980s, and no problems have come up in the annual audit.

But Carolyn Kirby, special taxing district coordinator for the county, said she has never seen that in Crofton's budget, and those calculations don't make sense.

"You can't have this year's surplus this year," she said. "If they are saying they anticipate a surplus, then that would be a surplus they can carry forward maybe they should be more conservative with their expenditures."

Sears said she questioned Swann several times about that line item before going to Kirby with concerns. She was angry to learn the figures were miscalculated.

"What troubles me is we have a town manager and a comptroller who are looking at this and saying `That's right,' " Sears said. "The board is relying on them for correct information."

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