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Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Jay – Internal Controls Over User Charges (2012M-128)


Released: November 23, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Town's internal controls over user charges for the period January 1, 2011, to March 31, 2012.

Background

The Town of Jay is located in Essex County. The Town is governed by an elected five-member Town Board, which consists of the Town Supervisor and four council members. The Town's budgeted appropriations for the 2012 fiscal year are approximately $2.32 million.

Key Findings

  • The Town did not have comprehensive written policies and procedures to provide adequate guidance and internal controls over water and sewer user charges and the Board provided only minimal oversight.
  • The Board has not formally adopted the water and sewer rates, adjustments are made to accounts with no support for the changes, collection dates for cash receipts are not documented, deposits are not made in a timely manner, and no one is performing a reconciliation of the water and sewer billing control accounts and the detail records.

Key Recommendations

  • Establish written policies and procedures to provide adequate guidance and internal controls over billing, collecting, adjusting, and depositing user charges, and reconciling user charges between control account balances and detail accounting records.
  • Establish and approve a schedule of water and sewer rates to be charged to customers for water and sewer services. Review and approve all adjustments made to customers' accounts and ensure that they are adequately documented, or designate someone independent of the billing and collecting of user charges to perform these functions. Record the date on the billing stubs when payments are received and ensure that collections are deposited in a timely manner. Ensure that water and sewer receivable control accounts are properly maintained in the Town's accounting records and that monthly reconciliations of these accounts with the supporting detailed records are performed, ensuring that any discrepancies are promptly investigated and resolved.

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