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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Village of Earlville – Internal Controls Over Selected Financial Operations (2011M-235)


Released: January 27, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Village's internal controls over selected financial operations for the period June 1, 2009 to May 31, 2010.

Background

The Village of Earlville is located in the Town of Sherburne in Chenango County, and the Town of Hamilton in Madison County, and serves approximately 800 residents. The Village is governed by a Board of Trustees (Board) which comprises a Mayor and four Trustees. The Mayor is the chief executive officer and the Clerk-Treasurer is the chief fiscal officer. The Village's 2009-10 general fund budget of $390,844 was funded primarily by real property taxes, revenues from fire protection contracts, and sales tax. The water fund budget of $103,778 was primarily funded by water rents.

Key Findings

  • The Village does not maintain adequate accounting records. The Clerk-Treasurer does not use double-entry accounting, maintain and reconcile control accounts, or use account numbers and titles as required by the State Comptroller's Uniform System of Accounts.
  • The Clerk-Treasurer did not file annual financial reports with the State Comptroller since 2006-07, and the Board failed to provide adequate oversight or training. During our audit, the Village hired a consulting firm to revise the accounting records and compile the annual financial reports at an additional cost of $16,000.
  • The Board did not adopt policies and procedures for collecting water rents, which had revenues of approximately $192,000 and $75,000 during 2009-10. The Village had no limit as to the number of times water customers can self- report meter readings and as a result, 38 percent of water customers were being billed based on the Clerk-Treasurer's estimates in July 2009.

Key Recommendations

  • Provide guidance, training and oversight to ensure that the Clerk-Treasurer maintains a complete accounting system.
  • Ensure that the Clerk-Treasurer files annual financial reports with OSC no later than 60 days after the close of the fiscal year.
  • Adopt comprehensive policies and procedures for water operations that include, among other things, establishing limits for the number of times a meter reading can be estimated and the number of times customers can self report readings.

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