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Emmitsburg discusses audit finding that would reallocate $82,240 in benefit costs and shift fund balances
Summary
Staff presented a federal corrective action plan tied to a single-audit finding that benefits should be allocated using the same basis as salaries. Estimates for FY27 show the general fund would carry about $82,240 more in expenses and the water fund about $75,000 more under the recommended allocation; the matter was discussed and staff were directed to prepare budget scenarios.
On April 13 the Emmitsburg Board of Commissioners discussed a corrective action plan arising from a federal single-audit finding: the town’s benefit costs have been allocated by home department rather than using the same level-of-effort basis as salaries.
Kim (finance) presented FY27 estimates showing the change would shift roughly $82,240 in expense onto the general fund while increasing water fund charges by about $75,000. “If we allocate by best practice... the general fund is recognizing $82,240 more in expense than it should have,” Kim said, and later confirmed the water fund “would have 75,000 more in charge.”
Commissioners raised concerns about the timing and local impacts: that reallocation could worsen the general fund’s shortfall, hamper the town’s ability to fund road projects and make grant applications less attractive if audit findings are not addressed. Staff noted the corrective action plan has been submitted to the federal government as required and urged that the FY27 budget be prepared following the recommended allocation so the board can see the true fund impacts prior to final adoption.
The item was discussion-only; the board gave staff consensus to prepare budgets and scenarios using the recommended allocation method so the commissioners can decide during the upcoming budget process.
