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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 Hurley – Internal Controls Over Selected Financial Operations (2012M-63)


Released: July 27, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the effectiveness of the Town's internal controls over procurement, information technology, and compliance with the Workers' Compensation Law for the period January 1, 2010, to August 10, 2011.

Background

The Town of Hurley is located in Ulster County. An elected five-member Town Board is the legislative body responsible for overseeing the Town's operations and finances. The 2011 Town operating budget was $3.1 million.

Key Findings

  • Town officials did not procure any of the 10 professional services providers tested, who were paid $510,419, through any form of competitive process. In addition, the Board did not enter into written agreements with nine of these providers.
  • Town officials did not obtain the required quotations for purchases totaling $26,254 from six of 12 vendors tested.
  • Two Board members had conflicts of interests in Town contracts.
  • The Town's computer system has multiple users with administrative rights.
  • The Board did not develop formal policies and procedures for adding, deleting, updating, and monitoring network user accounts.
  • The Town did not have workers' compensation and disability benefits insurance on file for 13 vendors who were paid $252,599.

Key Recommendations

  • Consider including a requirement in the Town's procurement policy that competitive methods such as RFPs be used to obtain professional services. Require written agreements with all professional service providers be executed detailing the service(s) to be provided and terms of compensation.
  • Monitor and enforce compliance with the Town's procurement policies to ensure that written and verbal quotes are obtained and documented, as required.
  • Take immediate action to resolve the existing prohibited conflict of interest.
  • Assess and review administrative designations on workstations, and disable access where appropriate.
  • Establish formal policies and procedures for adding and deleting network user accounts.
  • Comply with the Workers' Compensation Law and provide staff with appropriate procedures to be followed to secure the required documents.

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