A state audit of Brookville's finances has concluded the village has inadequate oversight of municipal funds and no long-term plan on how to spend its large surplus.

The audit, released last week by the office of New York State Comptroller Thomas P. DiNapoli, also warned village officials that they may be breaking the law by allowing the spouse of a trustee to work as the publisher of the village newsletter.

The potential conflict of interest involves Deputy Mayor Caroline Z. Bazzini, whose spouse earned $7,190 in fiscal year 2014 as publisher of the three-times-a-year village newsletter. State law bars most contracts with the spouses of municipal trustees.

In response to the audit, which examined village finances from June 1, 2013, through June 30, 2014, village officials said they believed they already had adequate oversight of finances -- and could find no one with the same expertise to do the publisher job for less money. State auditors said the village has not done enough to look for someone else.

Still, Brookville administrator Timothy Dougherty said, "We're going to comply with everything they recommended."

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Some of the deficiencies are common among local governments, said Brian Butry, DiNapoli's spokesman.

The village of 3,500 people had a surplus of nearly $2.4 million in fiscal 2014, more than half its total budget. The audit said surpluses are sometimes appropriate, but Brookville should create a policy governing how high its surpluses can rise and a long-term plan for how to spend the money.

Village officials told the comptroller's office it needs the surplus for several anticipated expenses, including road repairs.

Auditors also chided the village for a lack of independent audits to detect potential financial irregularities and errors.