DiNapoli’s Office Completes Local Government Audits
State Comptroller Thomas P. DiNapoli today announced his office completed the following audits:
City of Amsterdam – Internal Controls Over Cash Receipts (Montgomery County); Coram Fire District - Internal Controls Over Financial Activities and Information Technology (Suffolk County); and Village of Holley - Water Operations (Orleans County).
“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.”
City of Amsterdam – Internal Controls Over Cash Receipts
Except for minor deficiencies that DiNapoli’s auditors discussed with city officials, DiNapoli’s auditors generally found that the city’s internal controls over cash receipts had been adequately designed and were operating effectively. The overall effectiveness of internal controls can change with circumstances. Even effectively designed internal controls have inherent limitations, such as the possibility of human error or the deliberate circumvention of controls. Subsequent to field work for DiNapoli’s audit, city officials identified the occurrence of several non-standard transactions involving tax payments. City officials informed DiNapoli’s auditors of their concerns on Jan. 14, 2010 and DiNapoli’s auditors performed additional tests that confirmed their findings. City officials contacted local law enforcement officials and following an investigation, certain matters were referred to the District Attorney.
Coram Fire District - Internal Controls Over Financial Activities and Information Technology
DiNapoli’s auditors found that board and district officials did not always follow the board’s adopted procurement policy with respect to competitive bidding and documenting verbal and written price quotes for purchases not subject to competitive bidding requirements. Also, the board did not provide adequate oversight over district procurements to ensure that district officials were complying with the policy. The board also failed to adequately segregate the treasurer’s duties related to financial transactions and did not oversee the treasurer’s financial duties to mitigate the control risks associated with an inadequate segregation of duties. The board did not enforce its written payroll policies, and the treasurer is responsible for most aspects of payroll processing with no oversight by district management. Finally, the board did not adopt and implement IT policies addressing acceptable use of computer resources and a disaster recovery plan. In addition, district officials did not ensure physical security over the district’s server room.
Village of Holley - Water Operations
DiNapoli’s auditors found that village officials had not established appropriate procedures to properly account for water or ensure that billings were accurate and complete. As a result, the village suffered revenue losses totaling $282,000 that have impacted the water fund. The village can significantly improve the water fund’s financial condition, which had a deficit of approximately $140,000 on May 31, 2009, by improving water accountability and billing procedures.
If you have any questions or would like a comment from the Comptroller’s office regarding these audits, please call the Press Office at 518-474-4015.