Day: May 2, 2025

OSC Report Raises Concerns Over Financial Transparency in New York State Villages

In December 2024, the Office of the NY State Comptroller (OSC) issued a report titled “Transparency and Accountability of Fiscal Activities in Villages.” The report examined financial transparency in the 532 villages that comprise New York State, specifically focusing on the villages’ accounting records and Annual Financial Reports (AFRs) from the 2023 fiscal year. The OSC’s report raises concerns about many villages’ lack of timely reporting of financial information.

Why is transparency important?

The report emphasizes the need for transparency in village governments, especially when it comes to fiscal processes. Village officials are responsible for planning and managing operations in the village, including financial operations. Village boards are trusted with deciding how to spend villagers’ tax dollars, and as such, these boards must maintain high levels of transparency and accountability. According to the report, “transparency means ensuring that reliable, complete and timely information is readily available and accessible.” Not only does transparency allow villagers to know how their tax dollars are being spent, but it also gives the public the opportunity to provide feedback on important matters.

What are the financial reporting requirements for villages?

Villages are required by law to file Annual Financial Reports (AFRs) with the OSC between 60-120 days after the close of the fiscal year. AFRs are to be submitted by village CFOs (Chief Financial Officers). The AFR details the village’s financial transactions such as revenue, expenditures, debts, cash reserves, and fund balance. The village must make the AFR available to the public on the village’s official website and publish a notice in the village’s official newspaper within 10 days of the AFR being filed. According to the OSC report, consistent filing is important as it creates a comprehensive financial picture for stakeholders, including local officials, taxpayers, researchers, and legislators, among others.

What were the findings?

Below are some of the findings highlighted in the report for fiscal year 2023:

Of the 532 villages in New York State, only 246 (46%) filed their 2023 Annual Financial Report with the OCS by the required due date
210 villages (40%) filed their Annual Financial Reports after the due date
76 villages (14%) did not file their Annual Financial Reports at all

Though there was a 16% improvement in villages filing AFRs on time between 2019 and 2023, the percentage of villages that did not file an AFR at all has gone up from 1% in 2019 to 14% in 2023. The report calls this increase a “concerning trend.”

Why are villages not filing AFRs?

The OCS homed in on 30 villages to examine their financial records more closely. They found that 25 of the 30 villages did not file an AFR with OSC and four filed significantly late, while only one village filed within the required time period. In addition, 28 of the selected villages lacked any records of annual audits.

Village officials in the 25 villages who did not file AFRs stated the following as the primary reasons for not filing:

Incomplete accounting records (number one reason for not filing)
Vacancies or high turnover in CFO role
Loss of accounting staff
Lack of training/technical help for filing process
Delays encountered by CPAs
Delayed filing due to CFO taking significant leave
CFO was unaware of the filing requirement

What is the importance of timely and accurate financial reporting and audits?

Inadequate or untimely financial reporting leads to a lack of transparency in village operations and a lack of information for taxpayers and other stakeholders. Timely and accurate financial information is necessary for village boards to develop budgets, decide property tax levies, and make other financial plans. Annual audits are also crucial for monitoring the status of the village’s financial records, reducing the risk of mismanagement, and ensuring the proper use of public funds.

Looking for guidance?

The OSC provides training sessions for board members, which can be accessed here. In addition, RBT CPAs’ specialized government team offers auditing and consulting services to villages in the Hudson Valley and beyond. For assistance with financial reporting requirements, please don’t hesitate to reach out to one of our experts today. Give us a call today and find out how we can be Remarkably Better Together.

Do You Have a Succession Plan in Place?

You’ve put countless hours—and likely many years—of hard work, dedication, and passion into your restaurant business. To ensure that the legacy you have worked so hard to build continues after you step away, you need to formulate a plan for the future of your business. Creating a succession plan is crucial for ensuring business continuity and enabling a smooth transition of ownership when the time comes.

When is the best time to create a succession plan? The answer is, as soon as possible. A succession plan often takes years to develop and execute, as you will need time to identify, prepare, and mentor your chosen successor(s). You should begin planning for succession long before you expect to retire or sell your restaurant. Life is unpredictable, and you never know when circumstances may demand a transition of ownership. The absence of a succession plan can have devastating financial and operational consequences for your business. In the case of an unexpected event such as injury, illness, or even death, you’ll want to ensure that the management of your business is left in trusted hands.

Not only does a detailed succession plan provide a blueprint for the future of your company, but it also earns the confidence of your employees, investors, customers, and other stakeholders by assuring them that a plan is in place for the inevitable transition of leadership. As such, you should communicate your plan, as well as any changes or updates, to all relevant stakeholders. Your succession plan should be regularly reviewed and adjusted if necessary to ensure alignment with the business’s goals and needs.

A key element of any succession plan is, of course, the selection of a successor. Since many restaurants are family-run businesses, succession plans often involve selling or gifting ownership to the next generation. Other possible strategies include identifying and developing a non-relative successor, selling to an outside party, or establishing buy-sell agreements in the case of multiple owners. You may choose to sell the building if it is owner-occupied, or you may decide to sell the business, hold the real estate, and rent to the new business owners.

As you can see, there are several different ways to approach the issue of succession. But how do you know what the best course of action is for you and your business? That depends largely on your personal goals and individual situation. A trusted team of advisors—including an accounting professional—becomes a critical resource when making these kinds of decisions.

RBT CPAs’ accounting experts are available to work with you to create a succession plan that best meets your goals. Our firm has been supporting restaurants at all stages of their business lifecycles for over 55 years, and our professionals are deeply familiar with the unique challenges and opportunities facing the restaurant industry. You can count on our CPAs to help you navigate the tax implications and other financial considerations of transferring ownership of your business.

Don’t leave your legacy up to chance. Protect the future of your business by developing a succession plan today. Call RBT CPAs to speak with one of our experts, and find out how we can be Remarkably Better Together.

What Are Payroll Audits and Why Are They Important?

Labor Unions operate within a unique regulatory environment, and as such, must constantly monitor compliance in their financial processes. Compliance within labor unions is essential for maintaining the union’s financial and reputational integrity, as well as protecting the rights of both workers and employers. Compliance must be monitored at all levels of union operations, including among the contractors who employ union workers. One critical way to monitor compliance among union contractors is through payroll audits. Payroll audits ensure that contractors are correctly submitting union benefit contributions in compliance with Collective Bargaining Agreements (CBAs). It is important for unions to conduct regular internal payroll audits throughout the year in order to uphold the terms of CBAs, protect worker rights, minimize fraud risk, and avoid potentially serious penalties.

What happens during a union payroll audit?

During a union payroll audit, the auditor reviews a contractor’s payroll records for compliance with the terms of the union’s Collective Bargaining Agreement. Specifically, union payroll audits look to verify that contractors are reporting and remitting employee benefit contributions accurately. Payroll audits typically involve reviewing payroll records, verifying hours worked, checking for variable payments, and analyzing data for accuracy and compliance with the CBA. The goal is to protect the plan, trustees, and participants by verifying contributions are complete and accurate, and to prevent delinquencies and collections issues.

Who conducts union payroll audits and how often?

Payroll audits can be conducted by the union or benefit office. The union or benefit office can also obtain assistance from an outside vendor with experience in payroll audits, such as an accounting firm. Payroll audits can be conducted at various intervals, including annually, quarterly, and/or monthly. We recommend selecting a group of contractors each cycle to ensure that all are reviewed over a four-year period.

What are some common findings on union payroll audits?

Common findings include misreporting of hours and not properly submitting benefit contributions.

Why is it important for unions to carry out regular internal payroll audits?

Regular audits can lead to improved reporting accuracy, reduce delinquencies, prevent fraud, and help trustees identify problematic employers. They also provide feedback to plan administrators to ensure agreements are in place and contributions are made correctly. In addition, payroll audits help ensure compliance with ERISA (Employee Retirement Income Security Act) and other relevant regulations. They are required for ERISA audits. Frequent internal audits help the union avoid serious fines and penalties for noncompliance with Department of Labor regulations.

Looking for guidance?

One of the best ways to ensure compliance is by partnering with a reputable accounting firm like RBT CPAs. RBT CPAs’ experts are available to conduct payroll audits for your union and/or provide audit guidance. You can count on RBT CPAs’ accounting professionals to help maintain your union’s reputation for transparency and accountability. Our firm has been operating in the Hudson Valley and beyond for over 55 years, and we believe we succeed when our clients succeed. To learn more about our accounting, tax, audit, and advisory services, give us a call today.