April 10, 2012
Comptroller DiNapoli Releases Municipal Audits
New York State Comptroller Thomas P. DiNapoli today announced his office completed the audits of the Village of Amityville, Village of Bloomingburg, Carle Place Garbage District, Town of Copake, Town of Galway and the Massapequa Fire District.
Village of Amityville – Internal Controls Over Selected Financial Operations (Suffolk County)
The board has not adopted realistic budgets, does not routinely monitor the budget, and has not taken appropriate actions to maintain the village’s financial stability. For the 2008-09 and 2009-10 fiscal years, the village overspent appropriations resulting in a decline in the general fund balance from $1,880,880 at May 31, 2008 to a deficit of $603,888 at May 31, 2010. In addition, the board did not properly authorize or monitor capital projects and did not ensure that each project’s financial records contain sufficient information to detect and prevent cost overruns. Consequently, the village borrowed more than $450,000 from the general fund to finance various projects and the expenditures for four projects exceeded contract amounts by $122,420. Finally, internal controls over purchasing are not appropriately designed or operating effectively to safeguard village assets.
Village of Bloomingburg – Clerk-Treasurer’s Duties (Sullivan County)
The mayor and trustees did not provide adequate oversight over the clerk-treasurer. They did not ensure that the clerk-treasurer verified the billing and payroll work performed by third parties. The clerk-treasurer also performed all the financial duties with little oversight. Finally, the board did not provide for an annual audit of her records and reports as required by law. As a result, one employee was underpaid by $500, the village may have failed to bill and collect sewer rents, and there is an increased risk that mistakes or misdeeds could occur without detection.
Carle Place Garbage District – Board Oversight (Nassau County)
The board has not ensured that the district maintained a reasonable level of fund balance or that cash flow was sufficient to meet current obligations. Further, the board has not adopted a fund balance policy to provide guidance on how much fund balance to maintain or how fund balance will be used while also maintaining sufficient cash flow to fund operations. As a result, available fund balance has declined significantly, to the point that it will negatively impact the district’s ability to fund operations in the first two months of 2012. In addition, the board has not adopted a procurement policy, an investment policy, and a code of ethics, as required by law.
Town of Copake – Financial Oversight and Information Technology (Columbia County)
The board has not developed written policies and procedures for online banking or entered into an adequate agreement with its financial institution, and there is an inadequate segregation of duties with online transfer capability. The board does not conduct an adequate audit of claims, payroll registers were not certified, and the town’s payroll processing company keeps an electronic copy of the supervisor’s signature, which it uses to sign the payroll checks. In addition, the board has not adopted policies and procedures for data backup, developed a formal disaster recovery plan, or instituted breach notification procedures. Several town employees have access to areas of the financial software that are not consistent with their job responsibilities. In addition, the support staff of the town’s financial software vendor and two members of the town’s CPA firm also have full access to the financial software.
Town of Galway – Financial Operations (Saratoga County)
The board did not properly allocate sales tax revenue and adopt structurally balanced budgets. Instead, the town routinely relied heavily on appropriating unreserved fund balance to finance operations in its general and highway funds. As a result, three operating funds incurred budgetary deficits for various years.
Massapequa Fire District – Internal Controls Over Claims Processing, Competitive Quotations, and Information Technology (Nassau County)
The board is not auditing all claims to ensure that they are accurate, complete, and for legitimate district purchases. Although the chairman of the board or, in his absence, the vice-chairman generally reviews and approves the abstracts, all 25 of the claims tested, were not audited and approved by each member of the board, as required by law. In addition, although the district has adopted a procurement policy that contains specific guidelines for procuring goods and services not subject to competitive bidding, there were no procedures to ensure officers and employees complied with the policy. The board does not have a remote access policy and has not entered into remote access agreements with external parties. Finally, the district has no disaster recovery plan, and although there are back-up files that are stored offsite, they have never been used to ensure the process works.