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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 Edwards – Internal Controls Over Selected Financial Operations (2013M-20)


Released: April 12, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to assess the Town’s financial condition and internal controls over cash disbursements for the period January 1, 2011, through April 30, 2012.

Background

The Town of Edwards is located in St. Lawrence County and has a population of 1,160 residents. The Town contained the Village of Edwards through our audit period. The Village was dissolved on December 31, 2012 and the Town has taken over the services the Village previously provided to its residents. The Town Board, which is composed of five members, is the legislative body responsible for the general management and control of the Town’s financial and operational affairs. The Town’s 2012 budgeted operating expenditures totaled approximately $1.1 million.

Key Findings

  • The Board and Town officials did not adequately monitor the Town’s financial operations and take timely action to maintain the Town’s financial stability. The fund balances in the Town’s major operating funds fluctuated significantly over the last four years primarily because the Board over-appropriated fund balance in the budget and allowed the budget to be overspent.
  • Duties relating to the Town’s financial operations are not adequately segregated. The Supervisor is responsible for preparing and disbursing checks, preparing monthly bank reconciliations, recording cash disbursement entries into the accounting records, and preparing monthly reports to the Board, without the Board providing for an independent review and verification of her work.

Key Recommendations

  • Develop a fund balance policy that establishes a reasonable amount of fund balance that should be maintained in order to meet the Town’s needs. Develop and adopt budgets that include realistic estimates for revenues and expenditures and fund balance available for appropriation. Monitor actual results of Town operations against budget estimates throughout the fiscal year and ensure that appropriations are available before funds are expended. Do not permit any fund or appropriation account to be overdrawn at any time.
  • Segregate the Supervisor’s incompatible duties. If it is impractical to segregate duties, the Board should increase oversight of the Town’s financial records.

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