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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 Parma – Financial Management and Information Technology (2012M-96)


Released: January 11, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the Town’s management and oversight of financial operations and information technology (IT) for the period January 1, 2010, to January 20, 2012.

Background

The Town of Parma is located in Monroe County. The Town is governed by the Town Board, which comprises four elected members and an elected Town Supervisor. For the 2012 fiscal year, the Town’s budgeted appropriations were approximately $5.1 million, which were funded primarily with real property taxes, sales tax, and State and Federal aid.

Key Findings

  • The Board did not allocate adequate revenues to the town-outside-village (TOV) highway fund, which caused the TOV highway fund to report a deficit fund balance since 2007. At the same time, the Board appropriated nonexistent fund balance in the highway fund budget for three of the last five fiscal years, all the while knowing that the TOV highway fund had a deficit fund balance.
  • The Board did not audit or contract with an independent accountant to audit the books and records of the Supervisor or Town Clerk and did not develop a multi-year financial plan to address the Town’s long-term operational needs.
  • The Board has not adopted comprehensive IT policies and procedures or a disaster recovery plan to follow in the event of emergency.
  • The Town did not designate an administrator over the Town’s financial software application who is independent of the financial recordkeeping functions.
  • The Town does not maintain an inventory of its IT assets.

Key Recommendations

  • Develop and adopt budgets that include realistic estimates for revenues and expenditures and the appropriation of fund balance only in amounts that are available and necessary.
  • Conduct an annual audit of the financial records and reports of all Town officers and employees who received or disbursed money during the preceding fiscal year or contract with an independent auditor to conduct the audits. Develop a comprehensive multi-year financial plan.
  • Adopt comprehensive IT policies and procedures and establish a comprehensive written disaster recovery plan.
  • Designate an employee who does not work in the Finance Office as the system administrator for the Town’s financial software package.
  • Maintain an up-to-date inventory list of all of the Town’s computer and technology equipment and software.

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