The Town of Amherst is in good financial shape despite a lawsuit that has been a drain on town finances, according to a recent audit.

The audit, prepared for the town by the Drescher & Malecki firm, identified “no current year material weaknesses” and instead pointed to a number of strong points.

• The town generated a surplus of $1.1 million – excluding capital – in its governmental funds category, which includes the nine categories the town funds with taxes.

• Expenses have been brought “under control,” the auditors state, increasing less than 1 percent since 2008 despite double-digit increases in health care costs and a 100 percent increase in retirement costs.

• All issues laid out in previous audits have been addressed by the town

“We have done incredible things these last 3½ years,” said Supervisor Barry A. Weinstein. “Where can you find the kind of expenditures reduced with the maintenance of services and nary a complaint from anybody?”

Weinstein pointed to a number of cost-saving measures that have allowed the town to shore up its finances in recent years.

Among them are a new garbage contract that saved the town more than $2 million, the sale of the town’s compost facility and Mennonite Meeting House and the trimming of employee health care costs.

The audit shows town spending decreased from 2008 to 2009 before spiking for the next two years. Since 2011, spending has decreased steadily, according to the report.

“We’ve cut from the top, cut from the middle and we’ve also cut a little from the bottom,” Weinstein said.

The town’s financial outlook is not without a dark spot, though.

The general fund has been drained to less than $900,000 for next year’s budget because of the “Bissell case,” which involves a multimillion-dollar judgment the town paid to the victim of a roofing accident who was left partially paralyzed more than a decade ago.

The town was ordered to pay $23.4 million to the injured worker because the town was maintaining the property.

The town’s insurance covered roughly $10 million of the cost and the town has been paying the remaining $13 million since.

But it has spent more than five years in a battle against the state insurance agency to get reimbursed.

In the last two years, the town has had to pay more than $6 million to settle the suit, and the balance in the general fund has been reduced to less than 2 percent of the overall budget.

If the town were to recover the funds, the fund balance in that account would be more like 13 percent, the auditors stated.

“The town has been very stable,” she added. “So as long as the Bissell case comes out in our favor and as long as the pensions don’t keep increasing, we should be fine.”