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March 26, 2013

DiNapoli: Rensselaer County Employee Stole $200,000

County Officials Identified Theft, Requested Audit

Poor financial controls allowed a county employee to bilk Rensselaer County out of $208,597 over a six-year period, according to an audit released today by State Comptroller Thomas P. DiNapoli. The former employee was charged in July with grand larceny, falsifying business records and defrauding the government. The extent of her fraud, however, was not determined until county officials contacted DiNapoli’s office requesting a full audit.

“Local governments often don’t realize they lack necessary checks and balances until taxpayer funds go missing,” said DiNapoli. “Fortunately, county officials identified the shortfall and contacted my office so we could uncover the full extent of the theft. This individual has been held accountable for her wrongdoing, and officials have already taken steps to ensure public funds are being properly safeguarded in the future.”

From January 2007 through May 2012, the county’s public health department remitted more than 12,000 receipts totaling more than $6.5 million to the county bureau of finance for deposit. However, DiNapoli’s auditors found that the employee, a billing specialist in the health department, failed to remit 567 receipts totaling $111,582 for deposit. In addition, 365 receipts were recorded in the accounting records for $77,582 less than the actual amounts that were paid to the department.

These funds were associated with county fee collections for services such as immunizations, cancer screenings, evaluation and treatment services for children with special needs, and various recreational programs. Additionally, auditors identified 397 receipts totaling $19,433 from the county’s nursing unit that were not remitted for deposit.

Other audit findings include:

  • Officials did not oversee the duties of the billing specialist by reviewing entries in the accounting records or reconciling source documents supporting the amount of collections with accounting records;
  • Although the public health department established written procedures to govern the collection, recording and remittance of nursing and environmental health unit fees, the procedures did not adequately segregate incompatible duties or provide mitigating controls; and
  • Department officials did not properly account for pre-numbered duplicate receipts nor did they maintain an inventory of issued, voided, and unused receipts.

After identifying discrepancies and potential shortages in the collections, DiNapoli’s auditors found Rensselaer County officials established better controls to properly safeguard collections. As a result of these controls, auditors found all public health department collections in the county were properly recorded and remitted to the finance bureau from May 11, 2012 through August 31, 2012. Subsequent to audit fieldwork, county officials confirmed they also established a consolidated billing unit and implemented an internal audit function as additional controls. The county’s response is in included in the audit.

For a copy of the report and the county’s complete response to the audit visit:
http://www.osc.state.ny.us/localgov/audits/counties/2013/rensselaer.pdf


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