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November 2, 2007

DiNapoli: Nearly $153,000 Diverted From Port Henry Village Treasury

Lack of Supervision Over Clerk-Treasurer Partly to Blame for Loss

The Port Henry Village clerk-treasurer’s office had a cash shortage of nearly $153,000, according to an audit State Comptroller Thomas P. DiNapoli released today. The Comptroller’s Office conducted the audit at the request of Mayor Ruth McDonough who suspected theft. The shortage occurred over a five-year period between 2002 and 2007. State Police reportedly charged clerk-treasurer Barbara Tesar with grand larceny on March 28 as a result of their investigation of the matter.

“This is an enormous sum of money – well over 10 percent of the village’s annual budget. And it could have been avoided with proper supervision of the clerk-treasurer and tighter internal controls over village finances,” said DiNapoli. “The Mayor should be commended for discovering evidence of theft, and reaching out to my office for assistance. We stepped forward and determined how much money was missing, and more importantly, we’ve provided important guidance to be sure this doesn’t happen again.”

The cash shortage occurred during Tesar’s nearly seven-year tenure. She served in that position from June 2000 to March 2007 when she admitted to the village board that she had taken approximately $4,000 in garbage sticker receipts. However, state auditors subsequently determined that at least $152,864 in cash was unaccounted for between 2002 and 2007 from this and several other accounts.

The clerk-treasurer performed virtually all of her financial activities and duties with little or no assistance and/or oversight. Her duties included having custody of all village moneys; collecting and depositing cash receipts; maintaining accounting records; filing financial reports; preparing the village budget; preparing and presenting claims for payment by the board; preparing payrolls; co-signing checks with the mayor; and participating in the design and implementation of internal controls to guard against loss or misuse of village funds.

It was under these conditions that various methods were used to remove cash from the village office while avoiding detection by other village officials, DiNapoli noted.

Following the board’s decision to place Tesar on leave on March 12, Mayor McDonough contacted the State Comptroller’s Office to discuss evidence village funds were stolen. Tesar’s term ended on March 31, and she was not reappointed.

Comptroller DiNapoli has recommended that village officials:

  • seek reimbursement from the former clerk-treasurer;
  • increase internal controls over financial operations, and oversight of the clerk and treasurer;
  • ensure that collected moneys are accounted for and safely deposited in the bank;
  • maintain an accurate record of all billings; and
  • ensure that the Village’s bonding levels can sufficiently protect Village assets.

Village officials generally agreed with the Comptroller’s recommendations and indicated they would take corrective action.

Click here for a copy of the audit.



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