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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 Patchogue – Selected Financial Activities and Information Technology (2012M-76)


Released: August 24, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine select Village and Information Technology activities for the period June 1, 2010 – June 30, 2011. We expanded our scope back to February 13, 2001 to examine capital projects.

Background

The Village of Patchogue is located in the Town of Brookhaven in Suffolk County. The Village is governed by the Board of Trustees which consists of six elected trustees and an elected Mayor. The Village’s 2010 operating expenditures totaled approximately $7.8 million for the general fund, $3.8 million for the capital fund, and $736,000 for the sewer fund.

Key Findings

  • The Board did not properly authorize all capital projects, nor did it effectively monitor them. As a result, the Village had $284,808 in unauthorized expenditures and experienced cost overruns in two of the five projects reviewed totaling $1,900,957. In addition, the Village issued debt to reimburse the general fund for capital expenditures totaling $549,015, in violation of the Local Finance Law.
  • The Village did not receive all fees required before customers were allowed to hook up and discharge into the Village’s sewer system resulting in the Village not receiving revenues totaling $77,294. The Board failed to ensure sewer permits were issued in accordance with Local Law, causing the Village to accumulate $77,294 in lost sewer revenues.
  • The Board did not audit any of the 35 paid claims we reviewed totaling $33,485.
  • The Board has not established policies and procedures relating to the security of data and assets, including a formal disaster recovery plan. Controls over the Village’s IT system are not adequate to prevent unauthorized access to systems and data.

Key Recommendations

  • Adopt resolutions authorizing the maximum estimated cost of each project at its inception. Financing should be secured prior to starting each project. Require and review capital project expenditure reports and, if necessary, increase authorizations or change the project scope before a project is over-expended.
  • Ensure all outstanding sewer fees are collected before allowing a hook up to the sewer system. Ensure sewer permits are issued prior to allowing property owners to connect to the Village’s sewer system.
  • Conduct a thorough and deliberate audit of all claims for payment.
  • Develop and adopt IT policies and procedures that address acceptable computer use, remote access, breach notification and a disaster recovery plan.

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