Audits of Local Governments and School Districts
Town of Taghkanic – Internal Controls Over Cash Disbursements and Online Banking (2012M-25)
Released: May 18, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to examine internal controls over cash disbursements and online banking for the period January 1, 2010, through June 28, 2011.
The Town of Taghkanic is located in Columbia County. The Town Board, including the Town Supervisor, is the legislative body responsible for managing Town operations. The Town's budgeted appropriations for the 2011 fiscal year were approximately $1.15 million.
- The Town's internal controls over cash disbursements were not appropriately designed or operating effectively. There are no written Board policies or procedures for cash disbursements.
- The Supervisor was using a signature stamp to sign Town checks and a Board member (who was not the appointed Deputy Supervisor) was an authorized signer on the Town's bank accounts.
- The Town has not established adequate controls over online banking transactions. A significant segregation of duties weakness exists with the current electronic fund transfer process.
- The Town's bookkeeper (a non-Town employee) was able to enroll the Town in online banking and perform all of the online banking transactions during the audit period without any documented oversight.
- Establish written policies and procedures for cash disbursements.
- Continue to hand-sign all Town checks or use a facsimile signature, affixed by a check-signer or other machine, under the Supervisor's control. Remove the Board member as an authorized signer on the Town's bank accounts.
- Establish a comprehensive written online banking policy and require a monthly report of all online banking transactions that have occurred during the period.
- Identify all the services to be performed by the bookkeeper in order to provide a clear understanding of each party's roles and responsibilities.
Local Government and School Accountability Contact Information:
Phone: (518) 474-4037; Email: firstname.lastname@example.org
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236