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An official of this Allegany County town said Sunday that problems with account irregularities in 1988 and 1989 pointed out in an audit by the state comptroller's office have been or are being corrected.

"There was no one dipping into the funds taking money home. It was just bookkeeping," said Supervisor Carl Schneider, who did not become the town's chief fiscal officer until last Jan. 1.

The audit, released earlier this month by Comptroller Edward V. Regan's office, said an examination of town fiscal records found "indicators of fiscal stress" because it ended 1989 with deficits in the general fund and the sewer and lighting district accounts.

The report faulted the town for ending 1989 with a $2,243 deficit in the general fund.

In addition, it criticized the town for sewer fund deficits of $11,302 in 1989 and $14,905 in 1988 and lighting district fund deficits of $1,630 in 1988 and $1,915 in 1989.

Schneider said the general fund deficits developed because the Town Board borrowed money from the general fund during one fiscal year to make up deficits in the sewer and lighting district accounts and did not return the money to the general fund until the next fiscal year.

The sewer fund ran short, the supervisor said, because salary costs were higher than anticipated in 1988, when a Cannot distribute vertically former employee was ordered reinstated and awarded back pay.

To eliminate the deficit, sewer rates have been increased to produce additional revenue, Schneider said.

The lighting accounts developed deficits because the Town Board applied anticipated surpluses that did not fully materialize to the 1990 budget, he said.

The comptroller's report pointed out that town law states that "no expenditure shall be made . . . unless an amount has been appropriated for the particular purpose and is available."

If town officials determine a need to make an expenditure that exceeds budget appropriations, they can do so by adopting an appropriate resolution, the report said.

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