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Office of the State Comptroller - Local Government & School Accountability
Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Carrollton – Internal Controls Over Selected Financial Activities (2012M-50)


Released: August 17, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine internal controls over the Clerk's cash receipts from January 1, 2006, to the date of the Clerk's resignation on December 31, 2011, and rental of construction equipment from January 1, 2009, to December 31, 2011, and to verify that the Town complied with the requirements of the real property tax levy limitation.

Background

The Town of Carrollton is located in Cattaraugus County and has a population of approximately 1,300 residents. The elected Town Board, consisting of the Town Supervisor and four Council members, is the legislative body responsible for the general management and control of the Town's financial affairs. Budgeted appropriations for the 2012 fiscal year totaled approximately $1.3 million for the general, highway, and four special district funds.

Key Findings

  • Internal controls over cash receipts in the Clerk's office were not appropriately designed or operating effectively, which resulted in an apparent shortage of $3,405. The former Clerk did not adequately record all cash in a suitable cashbook or regularly issue duplicate receipts for moneys received. Also, she did not deposit cash receipts intact or make all deposits within three days of the total exceeding $250. In addition, the Board had not audited the Clerk's records since 2008.
  • The Board and other Town officials also failed in preventing the Town Supervisor from using Town resources for his personal benefit, which cost the Town nearly $15,000.
  • The Town's 2012 adopted budget includes a tax levy of $332,312, which exceeds the allowable tax levy of 323,985 by $8,327.

Key Recommendations

  • Refer the shortage identified in this report to the District Attorney's office for investigation. Adopt comprehensive policies and procedures for cash collections that require the Town Clerk to issue duplicate receipts, accurately record all collections, and deposit collections intact and in a timely manner. Audit the Clerk's records and reports at least annually.
  • Adopt comprehensive policies and procedures for the adequate oversight and control over all equipment rented by the Town.
  • Record the excess tax levy in a reserve and deposit this amount in a separate Town bank account. File corrected tax cap forms with OSC.

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