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Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Ghent – Internal Controls Over Tax Collections and Justice Court Operations (2011M-246)


Released: March 9, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Town’s internal controls over selected financial operations for the period January 1, 2010 through January 19, 2011.

Background

The Town of Ghent is located in Columbia County. The Town Board, comprised of the Supervisor and four Board members, is the legislative body responsible for managing Town operations. The 2011 budget for all funds was approximately $2.2 million.

Key Findings

  • The Board did not establish adequate policies for the collection and distribution of tax and fee monies, or develop and implement related control procedures to monitor the Collector’s operations. As a result, four tax overpayments totaling $5,000 went undetected for months, 23 tax penalties were either not assessed or were incorrectly assessed and 52 tax payments had fees that were incorrectly assessed.
  • The Board did not properly segregate the Collector’s duties or audit the Collector’s records, annually.
  • The Court clerks’ duties were not properly segregated and the Justices did not provide sufficient oversight or review of their work.
  • The Justices did not prepare monthly accountabilities comparing their cash amounts to their liabilities.

Key Recommendations

  • Develop a policy and procedures to ensure that all penalties and fees are being properly accounted for and any adjustments are authorized by the Board or the Supervisor. Develop a system of recording tax payments received that ensures each payment received is recorded and that only one payment is accepted for each property.
  • Segregate duties within the tax collection process, or provide appropriate compensating controls. Provide adequate management oversight of the Collector’s performance, including auditing Collector records on an annual basis.
  • Segregate duties within the Court’s operations so that one individual is not responsible for receiving, recording and depositing moneys, or implement appropriate compensating controls.
  • Ensure that a monthly accountability is performed and available cash reconciles with liabilities.

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