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Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Peru – Fiscal Oversight (2012M-104)


Released: September 7, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Town's internal controls over financial operations for the period January 1, 2011, to February 29, 2012.

Background

The Town of Peru is located in Clinton County and has a population of approximately 7,000. 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 $3.86 million.

Key Findings

  • The Board and Supervisor have not provided effective oversight of the Town's financial operations. Poor management oversight has contributed to the Town having incomplete and inaccurate accounting records. Therefore, the Board could not rely on the accounting records to monitor the Town's financial operations and determine the financial condition of the Town's operating funds and capital projects.
  • The incomplete accounting records and the Town's commingling of funds also precluded the Board from being able to determine the amount of interfund advances that were made and needed to be repaid, and the account clerk from being able to reconcile the Town's bank accounts.
  • The Board's failure to properly authorize, monitor, and oversee capital projects has resulted in capital projects being overspent and capital project expenditures being funded through the use of Town resources that were meant for other purposes.

Key Recommendations

  • Ensure that the Town's accounting records for the operating funds and capital projects funds are complete, accurate and maintained in a timely manner.
  • Authorize all interfund advances and ensure that they are properly recorded in the accounting records. Ensure that complete and accurate monthly bank reconciliations are performed.
  • Adopt a resolution at the inception of each capital project that identifies the project, authorizes the maximum estimated cost, and establishes how the project will be financed.

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