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Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Evans – Internal Controls Over Selected Financial Activities (2012M-70)


Released: September 14, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the Town's internal controls over debt proceeds, the lease-purchase agreement, water fund operations, and records and reports for the period January 1, 2007 to March 28, 2012.

Background

The Town of Evans is located in Erie County with a population of approximately 16,000 residents. The Town Board comprises two elected Council members and an elected Supervisor. The Town's 2012 budgeted expenditures totaled $11 million for general fund and highway fund operations and $1.9 million for water fund operations.

Key Findings

  • The Board and Supervisor did not provide adequate oversight of the Town's financial activities or monitor the use of debt proceeds to ensure they were appropriately used and properly accounted for.
  • Town officials allowed the water fund to sustain repeated operating losses.
  • The Town also entered into a lease-purchase agreement with a third party to reimburse the Town's highway and general funds for $343,000 in operating expenditures, of which the Town had received $288,411 by the end of the 2011 fiscal year. The Town does not have statutory authority to enter into a lease-purchase agreement for reimbursement from a third-party financing agency for machinery and equipment previously acquired.
  • The Board did not ensure that the Directors of Finance maintained accurate or timely information.

Key Recommendations

  • Ensure that bond proceeds are deposited, accounted for, and expended in accordance with statutory requirements.
  • Develop a written plan to address the operating losses and unrecorded inter-fund advances in the water fund and their impact on the Town's other funds.
  • Consult legal counsel regarding the remaining lease-purchase proceeds, and those not used in accordance with law, to ensure that action taken to address their use is in compliance with statutory requirements.
  • Ensure that the Director of Finance provides accurate financial information in a timely manner.

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