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August 6, 2008

 

DiNapoli: Whitehall Clerk Diverted Nearly $93,000

By End of 2007, Town Was Short of Cash by $28,000

Between 2003 and 2007, the former town clerk of the Town of Whitehall diverted $92,848 in public moneys, and then wrote personal checks back to the town for $64,800, according to an audit released by State Comptroller Thomas P. DiNapoli. This activity, which resulted in a $28,000 cash shortage by the end of 2007, occurred largely because there was little to no supervision of the clerk’s activities, and very weak controls over cash transactions.

Subsequent to her resignation in December 2007, the former town clerk submitted two checks to the town totaling $31,000 to cover the shortage in town accounts. DiNapoli is referring the audit’s findings to the Washington County District Attorney’s Office.

“Public officials have to keep a very close watch on public finances,” said DiNapoli. “No one should have the opportunity to play fast and loose with taxpayer dollars. Personnel charged with handling cash should be properly supervised, and there have to be controls in place to ensure that employees aren’t losing or stealing the public’s money.”

The audit found that:

  • the clerk did not record, deposit and remit moneys to the appropriate parties in a timely fashion, nor did she reconcile her records with bank account statements, and in some cases she did not record or deposit receipts at all;
  • the clerk, rather than deposit all moneys she collected intact, often substituted checks for collections received in cash;
  • the board did not effectively oversee the clerk’s fiscal operations to guard against abuse; and
  • the board did not ensure that internal controls were in place over cash transactions, and did not ensure that an adequate annual audit of the clerk’s records was performed.

DiNapoli recommended that town officials:

  • notify law enforcement about the cash shortage and ensure that all moneys owed the town have been recouped from the former clerk;
  • on a monthly basis review all transactions and reconcile town ledgers with bank accounts;
  • ensure that all moneys received are deposited intact and in a timely manner;
  • make payments in a timely manner; and
  • annually audit the clerk’s financial operations to be sure records and reports are accurate.

Town officials have generally agreed with DiNapoli’s recommendations, and indicated they would take corrective action.

Click here for a copy of the audit.

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