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February 10, 2012

 

Comptroller DiNapoli Releases Municipal Audits


New York State Comptroller Thomas P. DiNapoli today announced his office completed the audits of the Town of Clifton, Village of Earlville, Indian Falls Fire Department, Village of Rouses Point, Rushford Lake Recreation District, Town of Warren and the Westport Fire District.
           
"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."

Town of Clifton – Audit Follow Up (St. Lawrence County)
The purpose of this review was to assess the town's progress, as of October, 2011, in implementing auditors two recommendations in an audit report released in 2007. This audit report identified that the supervisor and a board member had prohibited interests in contracts. Based on auditors’ limited follow up procedures, it appears that the town has not implemented these two recommendations.

Village of Earlville – Internal Controls Over Selected Financial Operations (Chenango and Madison Counties)
The village does not maintain adequate accounting records. The clerk-treasurer does not use double-entry accounting, maintain and reconcile control accounts, or use account numbers and titles as required by the state Comptroller's Uniform System of Accounts. The clerk-treasurer did not file annual financial reports with the Comptroller since 2006-07, and the board failed to provide adequate oversight or training. During the audit, the village hired a consulting firm to revise the accounting records and compile the annual financial reports at an additional cost of $16,000. The board did not adopt policies and procedures for collecting water rents, which had revenues of approximately $192,000 and $75,000 during 2009-10. The village also had no limit as to the number of times water customers can self-report meter readings and as a result, 38 percent of water customers were being billed based on the clerk-treasurer's estimates in July 2009.

Indian Falls Fire Department – Internal Controls Over Financial Operations (Genesee County)
The treasurer performed monthly bank reconciliations and submitted monthly financial reports to the board, but did not submit an annual report. The board generally does not provide adequate oversight of company financial activities. The board did not appoint an auditing committee to audit the treasurer's records. In addition, the board does not audit bills or approve payments prior to checks being issued. While board resolutions authorized significant purchases and disbursements, they did not subsequently review the bills for payment.

Village of Rouses Point – Internal Controls Over Selected Financial Operations (Clinton County)
Village officials did not comply with competitive bidding requirements or use state contract options when procuring goods and services totaling $251,445 from four vendors, and as a result, paid $1,200 more than necessary for two vehicles. The board did not properly authorize capital and community development projects, monitor them to ensure that project funds were expended as authorized, and formally close out completed projects. The treasurer did not maintain individual accounting records for each project, and commingled the financing sources from all projects into the village's multi-fund checking account. Village officials were unaware that the community development fund had a deficit of $175,843, and therefore, cannot repay the advances that have been informally made to the fund. When the general fund is charged to eliminate the deficit, it will negatively affect the village's financial condition.

Rushford Lake Recreation District – Internal Controls Over Cash Receipts and Consultant Services (Allegany County)
District officials failed to adopt comprehensive policies and procedures for cash collection at the district office and the boat launch facility. The district secretary could not provide auditors with all duplicate receipts for our audit period. As a result, auditors could not confirm that all cash collected was appropriately accounted for and subsequently deposited in district accounts as required. The district also paid a consultant, a former district commissioner, to provide dam consulting services without soliciting proposals from other professionals or entering into a written contract to indicate the scope of services or basis for compensation. To date, the district made three payments to this consultant totaling $12,100.

Town of Warren – Internal Controls Over Selected Financial Operations (Herkimer County)
The supervisor did not maintain adequate accounting records and did not prepare accurate and complete reports for the board. Without financial reports, the board could not adequately monitor the town's financial affairs and, consequently, overspent the town's budget for the highway fund by $84,601 during the 2010 fiscal year. In addition, the board was unaware of two discrepancies in the town's accounting records: a $50,000 year-end adjustment and $797 in bank service fees. The supervisor also filed the town's annual report with the Office of the State Comptroller between five and six months late for the last two years. The board did not segregate the supervisor's financial duties and did not provide for an independent review and verification of his work. Auditors reviewed 65 payments totaling $783,219 that the town received during the audit period and found that the supervisor had not cashed and deposited six checks totaling $55,962.

Westport Fire District –Internal Controls Over Financial Operations (Essex County)
The board has not adopted a procurement policy as required by statute. The treasurer has not filed an annual financial report with the Office of the State Comptroller since at least 1995. The board also did not conduct an annual audit of the treasurer's records, as required by statute. As a whole, the board did not perform a thorough and deliberate audit of each claim prior to approving claims for payment; instead, one commissioner performed this function.


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