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March 9, 2010



DiNapoli’s Office Completes Local Government Audits

State Comptroller Thomas P. DiNapoli today announced his office completed the following audits: Town of Belfast – Internal Controls Over Financial Condition and Town Clerk Receipts (Allegany County); Town of Hancock – Tax Collector (Delaware County); Town of Henderson – Internal Controls Over Selected Financial Operations (Jefferson County); Village of Middleville – Internal Controls Over Financial Operations (Herkimer County); The Village of Milford – Fire Department Operations (Otsego County); and South Otselic Fire District – Board Oversight and Treasurer’s Duties (Chenango County).

“My office is continually looking for ways to help local governments improve their financial management practices,” DiNapoli said. “We encourage local officials to use these audits to evaluate current policies and procedures and make certain that taxpayer dollars are protected and being used for what they were intended.”

Town of Belfast – Internal Controls Over Financial Condition and Town Clerk Receipts
DiNapoli’s auditors found that the board did not receive adequate information on which to base its financial decisions because the supervisor and the town clerk did not ensure that all necessary financial records were maintained and that all financial activity was reported accurately and timely. Consequently, the board failed to adequately monitor the town’s financial operations and the operations of the town clerk, respectively. In addition, internal controls over cash receipts in the town clerk’s office were not appropriately designed or operating effectively. Our accountability on June 25, 2009 showed an overage in the town clerk’s account of $8,587.

Town of Hancock – Tax Collector
Auditor’s noted that the collector’s system of recording tax payments does not allow the collector to easily identify if there has been an error or omission in recording a tax payment. Although the collector can compare the daily bank deposits to the receipts recorded in the daily cash book, there is no way for the collector to compare the receipts recorded in the daily cash book, which are recorded by the date of receipt, to the tax roll book which is organized by tax bill number. As a result, at the time of settlement with the County Treasurer in 2008 and 2009, the collector was unable to identify the sources of surplus balances of approximately $8,000 and $8,550, respectively.

Town of Henderson – Internal Controls Over Selected Financial Operations
DiNapoli’s auditors found that the board has not established written procedures governing cash receipts or provided sufficient oversight over town officers and employees who receive cash on the behalf of the town. Because there is no policy or procedure governing issuing cash receipts, the town clerk and other town employees did not issue receipts for cash transfers and transactions, including $18,320 worth of construction and demolition disposal fees and $5,130 in vending machine water sales in 2008. Also, the board and the supervisor have not established an adequate segregation of the town clerk’s duties related to water rents receipts. Finally, the town’s two water districts (#1 and #2) did not repay interfund advances totaling $209,138 transferred from the general fund by the close of the fiscal year in which they were made, as required by General Municipal Law.

Village of Middleville – Internal Controls Over Financial Operations
Auditor’s found that the board did not provide adequate oversight of the village’s financial operations. The board did not segregate the treasurer’s duties or institute compensating controls where necessary and it did not annually audit the treasurer’s records and reports. The board did not establish controls to ensure that it audited all claims and that all claims were supported by adequate documentation and were in compliance with the village’s procurement policy. In addition, the board did not ensure that timesheets containing supervisory approval were prepared and kept on file to support payroll payments to hourly workers. Finally, auditors found that controls were not established to ensure cash receipts and disbursements were adequately safeguarded, and that financial activity was properly supported and accurately recorded and reported on a timely basis.

Village of Milford – Fire Department Operations
DiNapoli’s office noted that the board did not properly enter into fire protection contracts. The village did not have a fire protection contract with the Town of Milford. In addition, the company did not consent to the fire protection contract with the Town of Middlefield. Further, auditors found that during the audit period, the village paid $37,676, or approximately 35 percent of the total fire protection revenues collected from the towns of Milford and Middlefield to the company. However, the fire protection contract with the Town of Middlefield did not allow for such payments and there was no contract with the Town of Milford. Finally, the board did not ensure that Department purchases were made in accordance with statutory requirements and the village’s procurement policy.

South Otselic Fire District – Board Oversight and Treasurer’s Duties
Auditor’s found that the board did not properly oversee financial operations. As a result, the district did not collect over $10,000 from the Town of Lincklaen for fire protection services, the district had average monthly balances of $43,636 in excess of Federal Deposit Insurance Corporation (FDIC) coverage from March through September 2008, and district officials did not solicit price quotes for 16 purchases totaling $40,475. In addition, auditors found that accounting records were generally incomplete and inaccurate, and the treasurer did not prepare and submit annual financial reports to the OSC and town clerk for the fiscal years ending December 31, 2005 through December 31, 2008.

Click on the link(s) above for a copy of the audit.

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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