Audits of Local Governments and School Districts
Town of Warren – Internal Controls Over Selected Financial Operations (2011M-220)
Released: January 27, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to review the Town's internal controls over its financial operations for the period January 1, 2010 to December 31, 2010.
The Town of Warren (Town) is located in Herkimer County with a population of 1,145. The Town is governed by a Town Board (Board) which comprises four elected Board members and an elected Town Supervisor (Supervisor). The Town's 2011 budget totaled $187,785 for the general fund, $484,500 for the highway fund, $4,600 for the lighting districts, and $32,287 for the fire protection district.
- The Supervisor did not maintain adequate accounting records and did not prepare accurate and complete reports for the Board.
- Without financial reports, the Board could not adequately monitor the Town's financial affairs and, consequently, overspent the Town's budget for the highway fund by $84,601 during the 2010 fiscal year. In addition, the Board was unaware of two discrepancies in the Town's accounting records: a $50,000 year-end adjustment and $797 in bank service fees.
- The Supervisor also filed the Town's annual report with the Office of the State Comptroller between five and six months late for the last two years.
- The Board did not segregate the Supervisor's financial duties and did not provide for an independent review and verification of his work. We reviewed 65 payments totaling $783,219 that the Town received during our audit period and found that the Supervisor had not cashed and deposited six checks totaling $55,962.
- Maintain general ledgers, cash control accounts, cash receipt and disbursement journals, and revenue and expenditure ledgers for each fund and special district.
- Provide and use monthly financial reports to monitor actual results against the adopted budget, determine if the adopted budget needs to be adjusted during the fiscal year, and provide oversight of the Town's financial operations and the accuracy of its records.
- Prepare and file annual financial reports with the Office of the State Comptroller and the Town Clerk within 60 days after the close of the fiscal year.
- Segregate the Supervisor's incompatible duties or increase oversight of the Town's financial records.
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