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January 20, 2012

 

Comptroller DiNapoli Releases Municipal Audits

 


New York State Comptroller Thomas P. DiNapoli today announced his office completed the audits of the Town of Bedford, Town of Corning, Farmingville Fire District, Morley Fire District and the Town of Mount Hope.
           
"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 Bedford – Selected Financial Activities (Westchester County)
The board has not established policies relating to the billing, collecting and accounting for water district rents. Town officials have not developed procedures to ensure that duties are segregated, customers are properly billed, and that collections are accounted for consistently and are properly safeguarded. As a result, unpaid bills totaling $151,809 for 2009 and 2010 were re-levied on property taxes for fiscal years 2010 and 2011, respectively, without any penalties. The board and justices did not ensure that the internal controls over court operations were appropriately designed or operating effectively. The town overpaid 11 employees an extra $1,505 from January to March 2011 because they did not use the correct health insurance premium to compute the health insurance buyout incentive. If the calculation error is not corrected, the town will end up overpaying the 11 employees an additional $6,021 for the remaining nine months of the year.

Town of Corning – Budget Management (Steuben County)
The board did not develop and adopt accurate budgets that were based on realistic estimates of revenues and expenditures. This occurred because the supervisor did not provide relevant financial information during the budget process or throughout the year. As a result, fund balances that were appropriated as funding sources were not used, expenditures were overestimated, taxes were unnecessarily levied, and the town accumulated $1,108,773 of unreserved, unappropriated fund balance in the general town-wide fund, which is excessive in comparison to the town’s expenditure levels. Conversely, the town’s water and fire protection districts continue to be negatively impacted by the board’s poor budgeting practices and have been forced to rely on inter-fund borrowings to sustain operations. The board failed to develop comprehensive multiyear financial plans to ensure that sufficient funds were available to finance water district improvements.

Farmingville Fire District – Internal Controls Over Selected Financial Activities and Information Technology (Suffolk County)
The board did not ensure that district personnel complied with the district’s procurement policy, General Municipal Law or the travel policy for credit cards and did not adopt a policy for the use of credit cards for local purchases. As a result, the district failed to solicit competitive bids or quotes for purchases totaling $59,488. In addition, questionable credit card purchases for meals and clothing totaled $2,066. The board awarded a contract totaling $49,500 for the purchase of a racing truck. Despite spending $32,000, the district still had not received the vehicle during our audit. The board failed to require the vendor to deliver the vehicle prior to payment and has not pursued recovery of district’s payments. Auditors also reviewed 11 months of fuel transactions and found on average 300 gallons of gasoline could not be accounted for on a monthly basis thus resulting in approximately $7,700 of fuel unaccounted for. The board has not adopted an acceptable use policy or a disaster recovery plan for its IT system.

Morley Fire District – Internal Controls Over Financial Operations (St. Lawrence County)
The board has not adopted purchasing, investment and code of ethics policies, as required by statute. The secretary-treasurer has not filed an annual financial report with the Office of the State Comptroller since 2005. The secretary-treasurer provides the board with a verbal report of the cash balance in the checking account, but no periodic written financial reports showing the cash balance or budget vs. actual results. The board does not perform a proper audit of all claims or conduct an annual audit of the secretary-treasurer’s records, as required by town law.

Town of Mount Hope – Information Technology (Orange County)
The board did not adopt an acceptable computer use policy, a breach notification policy or a disaster recovery plan. As a result, the town’s computer systems and data are at risk of damage and loss and employees may not fulfill their legal obligation to notify affected individuals in the event that private information is compromised.


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