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January 03, 2011

 


DiNapoli: $27,000 From Scrap Material Processing
Missing in Western NY


An audit of 10 municipalities in western New York found that more than $27,000 in scrap material proceeds is missing, according to an audit released today by State Comptroller Thomas P. DiNapoli. The proceeds that were generated between January 2006 and December 2009 were never recorded in the municipalities' cash receipts records or deposited in their bank accounts.

"Missing money is never a good thing, especially when it's taxpayer dollars," DiNapoli said. "This is clearly a widespread problem. Local governments should have policies to make sure taxpayer money is protected. Times are tough. Local governments can't afford to let cash just slip through the cracks."

DiNapoli's auditors reviewed approximately $132,000 in scrap material sale proceeds that were generated by the 10 municipalities between January 2006 and December 2009. Roughly 21 percent, or $27,224, was unaccounted for. The entities did not receive this revenue because the governing boards failed to establish formal policies and procedures for controlling access to scrap materials and the revenues related to their sales. In some cases, the revenue was used to purchase items and pay for functions that were not included in the local government's or district's budgets.

The audit reviewed the time period January 1, 2006 to August 5, 2010. It examined nine local governments and one school district in western New York, including: Genesee County; the City of Batavia; the Towns of Cheektowaga, Elba, Middlebury, Oakfield, and Pembroke; the Villages of Elba and Sloan; and the Batavia City School District. Auditors were unable to account for all monies in eight of the 10 municipalities reviewed. The City of Batavia and Town of Oakfield were the only two municipalities where all monies were accounted for during the audit time period.

DiNapoli recommended the local officials:

  • Establish policies and procedures to ensure that sales proceeds are remitted only by check made payable to the local government or district;
  • Determine whether other undocumented cash transactions have occurred related to sales of scrap materials, and consult with counsel to determine whether they should pursue legal action to recover any and all local government or district funds;
  • Establish policies and procedures to protect scrap materials from theft or misuse; and
  • Establish policies and procedures to ensure that equipment is only used for authorized local government or district purposes, and that employees do not conduct personal scrap sales using the local governments or districts equipment.

The results of the audit and DiNapoli's recommendations have been discussed with local officials.

For a full copy of this audit, visit here.




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