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February 16, 2011

 

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed the audits of the Village of Dolgeville, Hampton Bays Fire District and Town of Niagara.

"My office's audits of local governments improve their financial management practices," DiNapoli said. "These audits are tools for local officials to make sure proper policies and procedures are in place to protect taxpayer dollars and provide the best possible service these taxpayer dollars can deliver."

Village of Dolgeville, Financial Management and Internal Controls Over Cash Receipts and Disbursements (Herkimer County)
The condition of the village’s general and water funds has declined over the past four years forcing the general and water funds to borrow from the sewer fund. The board did not properly manage the Restore Grant, causing the village to incur interest and management costs totaling $78,714 which will not be covered by the grant, and may not be able to recover any of the money that has been borrowed if restorations are not completed by the May 31, 2011 deadline. Finally, internal controls over cash transactions, including payroll, are not appropriately designed or operating effectively.

Hampton Bays Fire District, Internal Controls Over Financial Operations and Information Technology (Suffolk County)
DiNapoli’s auditors found that the treasurer improperly reserved $310,940 of fund balance for encumbrances that did not exist. As a result, the district understated its available fund balance. Auditors also found that the treasurer often pays claims prior to audit and approval by the board. Furthermore, the board did not adopt a purchasing policy and did not always comply with competitive bidding requirements. District officials also have not developed comprehensive IT policies that provide guidance to district employees on appropriate use of IT systems and data.

Town of Niagara - Internal Controls Over the Town Clerk’s Office (Niagara County)
DiNapoli’s auditors found that the town clerk’s office did not have an adequate system of internal controls. The deputy town clerk processed most of the transactions, received cash, recorded receipts and prepared deposits with insufficient oversight by the town clerk. The town clerk performed cursory reviews at the end of each month, which only ensured that gross amounts recorded in the daily cash report were deposited. These reviews did not ensure that all receipts were properly recorded or deposited intact, nor would they have detected altered or deleted records. The deputy used town funds to cash 10 of her personal checks totaling $1,136. Substituting personal checks for cash changes the composition of deposited receipts and compromises internal controls.


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