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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

City of Lockport – Independent Audit Services (2014M-238)


Released: December 5, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to determine the adequacy of the procurement of audit services and the effectiveness of such services as a means for the timely detection of errors and irregularities for the period January 1, 2012 through December 31, 2012.

Background

The City of Lockport is located in Niagara County and has a population of approximately 21,100. The City is governed by an elected Common Council and has an elected Treasurer who is chief financial officer. Previous audits demonstrated signs of fiscal stress in several areas and determined that the City’s accounting records were in poor condition, which the certified public accounting (CPA) firm made no indication of in its 2012 audit report.

Key Findings

  • City officials did not follow appropriate policies and procedures when procuring audit services because they did not use a request for proposal (RFP) process to solicit written proposals for audit services.
  • The City does not have an audit committee to oversee and evaluate the CPA firm’s work.
  • The City’s accounting records contained significant discrepancies.

Key Recommendations

  • Revise the procurement policy to require the use of RFPs when obtaining independent audit services and develop a process to be used in reviewing and rating the proposals to ensure that all requirements set forth in the RFP process are met.
  • Establish an audit committee to oversee the independent audit.
  • Ensure that the accounting records are accurate, complete and timely and that they fairly present financial activity.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236