"The fiscal watch program can help to restore financial stability," Petro said.

An analysis of finances requested by Yankee Lake's mayor revealed the village, which had a 2001 general fund budget of $9,012, incurred a year-end deficit of $1,034.

While cash designated for other funds covered the general fund deficit spending, it drained the current bank balance to $1,037. These conditions triggered criteria for a fiscal watch declaration.

The fiscal watch status, intended as an early warning, notifies governments that their finances are near fiscal emergency status. Under fiscal emergency, a state/local commission of officials and citizens assumes oversight of government finances.

The fiscal watch law allows Yankee Lake to receive advisory and technical support from the Office of Auditor of State, at no cost to the village, to help restore financial stability. The office will offer the village its expertise in serving taxpayers through better management of public funds.

Auditor of State Jim Petro conducts audits for nearly 5,000 units of state and local government. Petro has reduced staff by nearly 8 percent, returned approximately $25 million to the state treasury and uncovered hundreds of millions in misspent public funds.