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March 23, 2010




DiNapoli’s Office Completes Local Government Audits

State Comptroller Thomas P. DiNapoli today announced his office completed the following audits: Croton Falls Fire District – Internal Controls Over Financial Operations (Westchester County); Fairview Fire District – Internal Controls Over Payroll (Westchester County); Niagara County – Court and Trust Funds (Niagara County); and Richburg-Wirt Fire District – Financial Records and Reports (Allegany 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.”

Croton Falls Fire District – Internal Controls Over Financial Operations
DiNapoli’s auditors found that the board did not carry out its responsibility of overseeing or establishing appropriate internal controls over district activities. The board did not adopt written policies and procedures for cash management and purchasing. The district is still using a single-entry cash basis of accounting and reporting system and is also accounting for a separate reserve fund. Furthermore, the board did not properly prepare the district’s budget, and the treasurer failed to timely submit the required annual financial report to OSC and to each town within the district for the 2007 and 2008 fiscal years. The board failed to have district financial records audited for the 2007 fiscal year. Finally, the board did not use competition when selecting an independent auditor for the 2008 annual audit.

Fairview Fire District – Internal Controls Over Payroll
Auditors from DiNapoli’s office noted that the board did not have written payroll policies and procedures in place, which resulted in the chief and the treasurer developing their own informal procedures. Auditors also found that, in general, there was a lack of board oversight and segregation of duties in the payroll processing that allowed for errors and/or irregularities to occur and go undetected. For example, the treasurer increased pay rates and benefits totaling approximately $52,400 without the board’s prior written authorization.

Niagara County – Court and Trust Funds
DiNapoli’s auditors reviewed the treasurer’s processes, procedures, and records for the receipt and management of court and trust funds. He had not established adequate procedures, processes, or controls to properly safeguard these funds. The treasurer did not maintain adequate records and did not properly report the condition of these funds to the State Comptroller as prescribed by statute. In addition, funds improperly remained in his custody that should have been turned over to DiNapoli’s office as abandoned property.

Richburg-Wirt Fire District – Financial Records and Reports
Auditors from DiNapoli’s office noted that the treasurer did not maintain an adequate accounting system to record the district’s receipts and disbursements. She did not maintain check registers, cash receipts and disbursements journals, revenue and expenditure classification ledgers, or general ledger accounts. She did prepare and submit monthly financial reports to the board. However, the reports only included budgeted and actual expenditures and certificate of deposit balances. The reports did not include revenue information or bank account balances. In addition, auditors found that the reported balances for certificates of deposit did not agree with actual balances for the district’s certificates of deposit. Finally, the last annual update document (AUD) submitted to OSC was for the 2002 fiscal year, which was filed on April 21, 2003. The treasurer’s failure to file the last six AUDs (2003-2008), with no action on the part of the board, is a severe breakdown in the fiscal oversight by the board.

If you have any questions or would like a comment from the Comptroller’s Office regarding these audits, please contact the Press Office at 518-474-4015, or send an email to PressOffice@osc.state.ny.us.

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