25-131 : CIty of Buffalo, Management Letter

This agenda item, 25-131, concerns a Management Letter from the City of Buffalo's audit for the year ended June 30, 2024, prepared by Drescher & Malecki LLP. The audit did not identify any material weaknesses in internal control over financial reporting. However, the letter highlights several significant operational and financial matters:

• Solid Waste and Recycling Fund Deficit: Consistent operating deficits have led to significant interfund advances from the General Fund, totaling $23,399,207 as of June 30, 2024. The fund reported losses of approximately $4.1 million for FY2024. Recommendations include establishing adequate rates to support expenses and repay advances, and seeking a legal opinion on the appropriateness of General Fund transfers.
• Departmental Invoicing: The Buildings Department failed to invoice New York State for budgeted Court Facility Aid, resulting in zero reported revenue for this item in FY2024. Recommendations include collecting subsequent year amounts, establishing clear billing policies, and performing regular budget monitoring.
• American Rescue Plan Act (ARPA) Spending: As of June 30, 2024, $126.0 million of ARPA funds remain to be committed by December 31, 2024, and spent by December 31, 2026. The City is advised to accelerate its planned use and develop a multiyear plan to maximize revenue replacement allocation.
• Future Reporting Requirements: The City must implement several new GASB Statements (101, 102, 103, 104) in the coming fiscal years, which will impact financial reporting and disclosures.