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June 2, 2009



DiNapoli’s Office Completes Municipal Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed the audits of Internal Controls Over Purchasing – Town of Franklin (Franklin County); Internal Controls Over Separation Payments – City of Utica, Town of Amherst (Erie County), Columbia County, Onondaga County, City of Rochester and Town of Tonawanda (Erie County); and Internal Controls Over Town Operations – Town of Lumberland (Sullivan 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.”

Internal Controls Over Purchasing – Town of Franklin
Town officials did not always comply with the competitive bidding requirements established by state General Municipal Law (GML) or ensure that the town’s procurement policies and procedures were consistently followed. The town paid approximately $9,400 more than state contract prices on $17,320 in propane purchases during the audit period, and purchases totaling $44,290 were not properly supported by purchase orders, did not receive prior approval, and/or were not based on price quotes as required by the town’s procurement policy. The highway superintendent did not maintain adequate records and controls over the town’s purchases and deliveries of approximately 18,700 gallons of gasoline and diesel fuel, and employees did not always properly maintain fuel pumping logs.

Internal Controls Over Separation Payments – City of Utica, Town of Amherst, Columbia County, Onondaga County, City of Rochester and Town of Tonawanda
Generally, the municipalities had sound procedures for maintaining time and attendance records, processing separation payments and managing post-employment health insurance benefits. Auditors’ examination of more than $3.7 million in separation payments to 300 former employees of these six municipalities disclosed overpayments of only $15,365, or about 0.4 percent of the total audited. Similarly, tests of post-employment health insurance benefit determinations for these 300 individuals found only four errors that resulted in overpayments of $16,604. Auditors nonetheless identified some improvement opportunities.

Internal Controls Over Town Operations – Town of Lumberland
The supervisor’s duties were not properly segregated and his financial activities were not accounted for or reported in a reliable and timely manner. For example, the supervisor did not ensure that his assistant prepared bank reconciliations during 2007, and although the reconciliations that she did prepare during 2008 were mathematically correct, they included numerous accounting errors totaling $108,000. In addition, the justices did not provide adequate oversight over the court clerk. For example, the court clerk’s cash receipt and disbursement duties were not segregated, and although the justices occasionally signed checks and monthly reports to serve as a compensating control, the monthly reports did not include bail activity. Finally, diesel and unleaded fuel supplies were not adequately safeguarded and accounted for.

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 or send an email.

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