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November 5, 2009

Village of Arkport Officials Pay Themselves and Another Official Tens of Thousands of Dollars Without Board Approval

Audit Disclosed Personal Use of Credit Cards & Cell Phones

Lax oversight by the Arkport village board led to nearly $43,000 in unauthorized leave payments to three officials and more than $1,500 in personal use of village credit cards and cell phones by officials and family members, according to an audit released by State Comptroller Thomas P. DiNapoli. The audit covered the period June 2005 to February 2009.

“Public officials need to keep a close eye on every tax dollar,” said DiNapoli. “And that means you don’t pay money to someone who’s not entitled to it and you don’t use government credit cards or cell phones for personal use. Those are taxpayer credit cards and taxpayer cell phones.”

DiNapoli’s auditors found that the former clerk-treasurer and deputy clerk-treasurer, without board approval, paid themselves and the public works superintendent a total of $42,815. For fiscal years 2006, 2007 and 2008, the clerk-treasurer paid herself $25,749 and the deputy, $2,727. They paid the DPW superintendent $14,339 for this period.

The former clerk-treasurer and deputy claimed these payments were for accumulated leave time. However, auditors found no evidence that the board authorized the payments. The deputy and DPW superintendent each maintained their own leave records and submitted unapproved biweekly timesheets. The former clerk-treasurer did not even do this.

Auditors found that six cell phones were used for the personal benefit of a former mayor, a former trustee, the former clerk-treasurer, the code enforcement officer and their family members. Approximately $1,578 of $3,664 was not reimbursed to the village for the personal use of these phones because the former clerk-treasurer and deputy did not correctly calculate the reimbursement owed.

Additionally, DiNapoli’s auditors found that the former clerk-treasurer used the village credit card for groceries and other items deemed personal in nature. Other items on the receipts were personal in nature, but not specifically identified as purchases for either the village or the former clerk-treasurer.

In addition to direct reimbursements to the credit card vendor and the village, the former clerk treasurer reimbursed the village $336 that could not be identified to a specific purpose. Because of missing paperwork, auditors were unable to determine whether the former clerk-treasurer reimbursed the villages for all inappropriate use of village assets.

Auditors also found that the village did not:

  • Properly supervise personnel handling cash, putting tax dollars at risk of loss or theft;
  • Audit individual claims or require accurate and up-to-date financial reports; and
  • Complete an annual audit of the clerk-treasurer’s books and records for two of the three years of the audit period and failed to act on corrective recommendations by the village’s CPA.

DiNapoli recommended that village officials:

  • Develop and adopt a written personnel policy that outlines all employee benefits and ensure its distribution to all employees;
  • Recover the unauthorized accrued leave payments;
  • Designate a village officer or employee to review timesheets;
  • Seek reimbursement for the personal use of cellular phones by village employees and officials;
  • Ensure that village credit cards are not used for personal purposes;
  • Ensure each payment claim has sufficient supporting documentation;
  • Segregate the duties of the treasurer or institute appropriate compensating controls;
  • Ensure accurate financial reports are prepared and filed with the board and the State Comptroller;
  • Audit, or cause to be audited, the treasurer’s annual financial report and supporting records every year; and
  • Review the CPA’s assessment and develop an appropriate corrective action plan.

Village officials generally agreed with DiNapoli’s recommendations and indicated they have already taken or plan to take corrective action.

For a copy of the audit, click here:


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