A State Audit has found that the Village of Fredonia Trustees have not adequately understood the village’s financial condition and their actions have led to the village’s deteriorating financial situation.
The State Comptroller’s Office conducted an audit of the period of June 1, 2019 through August 21, 2025.
Auditors said that while the Trustees Board told them they routinely monitored financial operations, they said findings showed that Trustees, “…did not fully understand the Village’s financial condition and relied heavily on the Village Treasurer for guidance.”
The audit found that the Board did not take appropriate actions to maintain the Village’s fiscal stability, such as adopting structurally balanced budgets and written multi-year capital and financial plans and ensuring that the Treasurer filed annual statements and AFRs when required. As a result, the Village’s financial condition deteriorated over a six-year period from the 2019-20 through 2024-25 fiscal years.
For the 2024-25 fiscal year, the Village’s budgeted appropriations totaled $11.6 million, which included general fund appropriations totaling $7.4 million, water fund appropriations totaling $2.2 million and sewer fund appropriations totaling $2 million.
Auditors said that Trustees told them they continually relied on appropriating fund balance (which represents the difference between revenues and expenditures accumulated over time) to finance general fund operations, avoid increasing real property taxes, or reduce operating expenditures. From the 2019-20 through 2024-25 fiscal years, the Board adopted budgets for the general, water and sewer funds with planned operating deficits that totaled $3 million over the past six years.
The Board’s budgeting practices caused unrestricted fund balance in the general, water and sewer funds to decline by more than $2.8 million from the 2019-20 through 2024-25 fiscal years. As of May 31, 2024, all three operating funds had unrestricted fund balance deficits, as follows:
- General fund, approximately $249,000
- Water fund, approximately $678,000
- Sewer fund, approximately $554,000
The state said that as a result, the Village did not have sufficient resources to fund 2024-25 operating expenditures and had to issue an $825,000 revenue anticipation note (RAN). When the RAN matured the following year, officials had to increase the Village’s real property tax levy by $1.7 million, a 55 percent tax increase in the 2025-26 fiscal year to repay the RAN and to balance recurring revenues with recurring expenditures.
The Board also did not develop or adopt written comprehensive multi-year financial and capital plans to address the Village’s long-term operational and capital needs. In addition, the Board did not ensure that the Treasurer filed an annual statement with the Village Clerk, or properly filed the AFR with the New York State Comptroller’s Office over the past five fiscal years.
The report includes eight recommendations that, if implemented, will help improve the Village’s financial operations including taking actions to maintain the Village’s fiscal stability. Village officials agreed with the Comptroller’s Office recommendations and have initiated or indicated they planned to initiate corrective action.
The complete audit can be viewed here: https://www.osc.ny.gov/files/local-government/audits/2026/pdf/fredonia-village-2025-149.pdf
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