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November 23, 2010

 

DiNapoli: Lack of Financial Controls Leads to Surplus Funds in Town of Hamilton

Because of poor financial controls and practices, Town of Hamilton officials were unable to determine how much money they actually had in their fund balance.  As a result, the town accumulated more than $1.2 million in cash that should have been used to benefit taxpayers, according to an audit released today by New York State Comptroller Thomas P. DiNapoli.

“With the system Hamilton had in place, it was not impossible for the town board to adequately oversee town finances,” DiNapoli said. “Hamilton has to do a much better job protecting taxpayer money and accounting for its funds.”

The town collected $656,000 in taxes for the 2009 fiscal year even though it had $1.2 million in cash already on hand.  The town’s total annual budget in 2009 was $1.16 million. The excess funds could have been used to bolster necessary reserves, reduce property taxes or pay for one-time expenses.

DiNapoli’s auditors found that the board could not monitor the town’s financial condition because the former supervisor did not provide monthly financial reports. He also failed to file annual financial reports with the Office of the State Comptroller or the town clerk since 2003.

Auditors determined that the former supervisor did not provide sufficient oversight over town bookkeepers, leaving accounting records unmaintained.  

Additionally, the board did not audit the supervisor’s records or reports, and town officials were unable to determine if one fund’s cash has been improperly used. This means there is an increased risk that funds could be misused without detection.
 
DiNapoli’s auditors recommended the board:

  • use excess fund balance or surplus cash to benefit taxpayers;
  • ensure that it receives the necessary financial documentation to monitor the town’s finances; and
  • audit the records and reports of the supervisor on an annual basis.

Town officials generally agreed with the audit and said they will take correction actions.

A copy of the complete audit can be found here.




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