Village of Altmar – Apparent Misappropriation of Funds (2013M-331)

Issued Date
March 19, 2014

Purpose of Examination

The purpose of our examination was to determine if the Village Clerk-Treasurer properly accounted for the Village’s cash receipts and disbursements during the period June 1, 2009 to May 31, 2013.

Background

The Village, located in Oswego County, was first incorporated in 1876 and had a population of approximately 400 residents. In July 2010, voters in the Village presented a petition to the Village Board calling for a public referendum on dissolving the Village government and merging operations with the Town of Albion. The Village dissolved on June 1, 2013. All of the remaining Village assets, on the effective date of the dissolution, were turned over to the Town of Albion and became Town assets.

During its existence, the Village was governed by a three-member governing board consisting of a Mayor and two trustees. For the fiscal year ended May 31, 2013, the Village’s budgeted appropriations totaled $204,045.

Key Finding

  • Based on our examination, it appears that the Clerk-Treasurer misappropriated approximately $115,891 of Village funds, made questionable purchases totaling $1,405 and received questionable expenditure reimbursements totaling $319. In total, we question the propriety of $117,615 in Village transactions that were initiated by the Clerk-Treasurer. The Clerk-Treasurer was responsible for receiving funds and making bank deposits, preparing and signing Village checks, processing payrolls, maintaining the Village’s accounting records, and receiving unopened monthly bank statements and canceled check images. She performed these functions with virtually no Board oversight. This created an environment where the Clerk-Treasurer was able to write checks to herself or to others for payment of her personal expenses without Board authorization and divert receipts instead of depositing them into Village accounts. This occurred over a four-year period without detection by the Mayor or the Board.

Key Recommendations

  • Consult with the Town’s attorney and take the appropriate steps to recover any misappropriated moneys and assets from the Clerk-Treasurer.
  • Consult with the former Village’s insurance agent to determine if the Village had employee bonding and whether the Town can submit a claim to recover all, or a portion of the loss.