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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 Bovina – Internal Controls Over Cash Receipts and Disbursements (2012M-237)


Released: February 22, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the Town’s internal controls over cash receipts and disbursements for the period January 1, 2011, through October 15, 2012.

Background

The Town of Bovina is located in Delaware County and has a population of 630 residents. The Town is governed by an elected five-member Town Board comprising the Town Supervisor and four council members. The Town’s 2012 budget appropriations were $936,700 funded primarily with real property taxes, water and sewer charges, and State aid.

Key Findings

  • The Board and Supervisor did not adequately segregate duties related to the collection, recording, and depositing of receipts, the preparation and recording of disbursements, and bank reconciliations.
  • The Supervisor allowed the bookkeeper to affix the Supervisor’s signature on disbursement checks using a rubber stamp.
  • No one compares the approved claim warrants to the checks that cleared the bank.
  • There was no documentation of an annual Board audit of the Supervisor’s records.

Key Recommendations

  • Adopt written policies and procedures that include segregating incompatible functions over the cash receipts and disbursements where possible or implement compensating controls where segregating incompatible functions is not possible.
  • Discontinue delegating the Supervisor’s check signing authority to the bookkeeper. Manually sign all Town checks.
  • Periodically compare the approved warrants with the checks cleared, as shown on the bank statements, and review the bank reconciliations.
  • Thoroughly document the annual audit process in the Board minutes.

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