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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 Red Creek – Board Oversight of the Clerk-Treasurer and Water Operations (2014M-173)


Released: October 24, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the Board’s oversight of the Clerk-Treasurer and established internal controls over water operations for the period June 1, 2012 through February 11, 2014.

Background

The Village of Red Creek is located in the Town of Wolcott in Wayne County and has approximately 500 residents. The Village is governed by a Board of Trustees, which comprises four elected Trustees and an elected Mayor. Budgeted appropriations for the general, water and sewer funds for the 2013–14 fiscal year are approximately $453,000.

Key Findings

  • Duties in the Clerk-Treasurer’s office are not appropriately segregated. The Clerk-Treasurer performs all functions related to receipts, disbursements and billed receivables, and maintains payroll records, without adequate mitigating controls or oversight.
  • The Board does not perform, or contract with an independent auditor to perform, an annual audit of the Clerk-Treasurer’s records.
  • Village officials do not have procedures for reconciling the water produced by the Village’s water system with the water billed to the Village’s customers.
  • Village officials should periodically compare water produced with water billed and identify whether the difference is caused by recordkeeping errors, leaks, thefts or malfunctioning meters.

Key Recommendations

  • Ensure that duties in the Clerk-Treasurer's office are segregated properly, or provide sufficient mitigating controls when segregation of duties is not possible or practical.
  • Audit the Clerk-Treasurer’s records and reports annually, or engage the services of an independent public accountant to conduct the audit.
  • Develop procedures for periodically reconciling the amount of water produced with the amount billed.
  • Determine the causes for and take steps to reduce the amount of unaccounted-for water to improve the efficiency of their water distribution system, enhance the financial health of the Village’s water fund and preserve water resources.

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