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November 26, 2010


DiNapoli's Office Completes Audit of the Town of Watertown

New York State Comptroller Thomas P. DiNapoli today announced his office completed the audit of the Town of Watertown entitled: Internal Controls Over Selected Financial Activities.

“My office’s audits of local governments improve their financial management practices,” DiNapoli said. “Government is supposed to use tax dollars to provide services to its citizens. Watertown paid a lot of money to the local development corporation without getting much in return.  Watertown needs to do a better job ensuring that all payments are made only for the community’s benefit.”

DiNapoli’s auditors found the Watertown board had not established a written contract stating the purpose of the town’s $60,000 payment to its local development corporation (LDC). The town has not received any discernable benefit or fair and adequate consideration from the LDC for the payment. Auditors consider the payment to be an improper gift, pursuant to Not-For-Profit Corporation Law and the State Constitution; and therefore, it is not permitted by law.

DiNapoli also believes that it was improper for the LDC, in turn, to "re-gift" or re-direct $50,000 of those moneys to a private ambulance service.

Auditors also found the board did not fulfill its oversight responsibilities because it did not provide for annual audits of town records and reports during our audit period. Internal controls were not in place to ensure that the town’s financial activity for interfund loans were properly supported and accurately recorded and reported. By Dec. 31, 2009, five special district funds had a combined deficit of $604,420.

For a full copy of the audit, see:

If you have any questions, or would like a comment from the Comptroller’s press office regarding this audit, please call 518-474-4015, or send an email to



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