Audits of Local Governments and School Districts
Town of Avon – Internal Controls Over Cash Receipts and Disbursements (2011M-166)
Released: January 20, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to review the Town's cash receipts and disbursements for the period January 1, 2010, through June 7, 2011.
The Town of Avon is located in the northern part of Livingston County. The Town has five elected Town Board members. The Board is the legislative body responsible for managing Town operations. For 2010, the Town has a combined general fund budget of approximately $970,000, a combined highway fund budget of approximately $890,000, and a water district budget of approximately $580,000.
- The Board did not establish adequate controls over cash receipts and disbursements. Specifically, the Board did not design or implement effective policies and procedures to ensure that cash is properly safeguarded. Town officials did not segregate the duties for the collection, recording and depositing of receipts, or for the preparation and recording of disbursements and bank reconciliations.
- Neither the Board nor the Supervisor reviewed bank reconciliations prepared by an outside accounting firm (Firm). The Supervisor did not monitor the financial duties performed by the Firm, and the Town's accounting records were held in a private business's offices in another Town.
- The Supervisor allows his confidential secretary to review and stamp his signature on disbursement checks prepared by the Firm.
- Adopt written policies and procedures that include segregating incompatible functions over the cash receipts and disbursements processes where possible.
- Review bank reconciliations to ensure that they are performed properly and that discrepancies are investigated and corrected immediately. Ensure that the Town's records are readily available for public inspection, as required by statute.
- Review and sign all checks either manually or, if authorized by the Board, by using a check signer machine.
Local Government and School Accountability Contact Information:
Phone: (518) 474-4037; Email: firstname.lastname@example.org
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236