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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Waterloo – Financial Management and Information Technology (2012M-137)


Released: December 14, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Town's financial management and internal controls over information technology (IT) for the period January 1, 2010, through March 30, 2012.

Background

The Town of Waterloo is located in Seneca County and has a population of about 8,000. The Town is governed by an elected Town Board which comprises four Council members and a Supervisor. Budgeted appropriations totaled approximately $2.6 million for 2011.

Key Findings

  • The Board and Town officials have not developed long-term financial plans, or policies or procedures to govern budgeting practices and the level of unexpended surplus funds to maintain. Lacking an established financial plan and budgetary guidance, Town officials were unable to effectively plan for the use of, or properly account for, community benefit agreement (CBA) revenues. As a result, the Board has adopted budgets that were not based on sound and realistic estimates of revenues and expenditures, and the Town has accumulated significant unexpended surplus funds, which are excessive. For example, the TW general and TOV highway funds had unexpended surplus funds totaling $964,048 and $133,855 at the end of the 2011 year. These amounts represented 106 percent and 46 percent of 2012 appropriations and exceeded the 2012 tax levy for the TW general fund by $553,753.
  • The Board has not developed or implemented policies or procedures for acceptable computer and Internet use, breach notification or disaster recovery.
  • One part-time clerk has access to areas of the financial software that are not consistent with assigned job responsibilities.

Key Recommendations

  • Develop a multi-year financial plan to establish the goals and objectives for funding long-term operating and capital needs. Establish a policy and develop procedures to govern the Town's budgeting practices. Use excess fund balance identified in this report in a manner that benefits Town taxpayers.
  • Develop and implement policies and procedures that address IT security issues and develop a formal disaster recovery plan.
  • Create a user name and password for the part-time clerk with access to only the functions that are consistent with assigned job responsibilities.

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