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May 24, 2007

State Audit Finds Misuse of Taxpayer Money
in Town of Denmark

Audit Referred to the State Attorney General’s Office

The former supervisor of the Town of Denmark, Lewis County, overpaid himself more than $30,000 and he and his wife used town accounts for their own questionable purposes, according to an audit released today by State Comptroller Thomas P. DiNapoli. Auditors also found more than $500,000 in payments that were not authorized by the town board and not properly documented over a five-year period. The findings of the audit have been referred to the State Attorney General’s Office.

“The former supervisor violated the public’s trust and abused his position for his own personal gain. He got away with it for some time because no one was watching him,” State Comptroller Thomas P. DiNapoli said. “It’s over now. We’ve referred this to the State Attorney General’s office to pursue the appropriate legal action. But this should not happen again. The town board has to make sure that one person doesn’t control all aspects of the town’s financial operations. This is taxpayer money, and the taxpayer should be protected.”

The audit was requested by town officials in January 2006 after questionable disbursements and problems with the town records were identified. Auditors found that between January 2001 and December 2005 the former Supervisor Danny Hurlburt made salary payments to himself for $32,216 that he was not entitled to and that had not been approved by the board. He did repay the town $20,705 of this money by not cashing some of his payroll checks and making a direct payment to the town.

Evidence was also found that the former supervisor and his wife inappropriately used town accounts for their own questionable purposes. In December 2004, a deposit of $15,000 was made from a business with the same address as the former supervisor into the town’s checking account. The check was signed by Hurlburt’s wife. Payments were then made for $7,463 and $7,537 in January 2005 to the same business. There were no records to explain the reason for these transactions.

Auditors found that the town’s accounting records were inaccurate and in complete disarray. Auditors examined all of the town’s 4,104 disbursements during this time period and found that $514,000 in payments were for expenses that had not been authorized by the town board or properly documented. For example, auditors found two payments for $2,696 made to a company for office furniture in which the former supervisor’s wife had an ownership interest. In addition, a payment was made to an office supply store for $976 for items that were later returned but the refund was not put into the town’s bank account and is unaccounted for.

Auditors made 12 recommendations including that the town board recover the $11,511 in unauthorized salary payments from the town supervisor and further investigate the questionable payments made to the former supervisor and his wife. The board should establish procedures to ensure that all expense claims are audited prior to payment and that there has been verification that goods and services have been received. Auditors also made a number of recommendations to improve the town’s fiscal records and practices and improve internal controls.

The town board agreed with the audit findings and indicated some steps that it is taking to address the recommendations. The full response is included in the audit.

The town’s operating budget in 2005 was $785,363.

Click here for a copy of the audit.


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