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September 12, 2013

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Town of Chautauqua, Village of Fleischmanns, Town of Forestport, Town of Grand Island, Town of Hartwick, Locust Valley Water District, Town of Lyndon, Town of Lyonsdale, Village of Pulaski and the Town of Somers.

“My office's audits of local governments improve their financial management practices," DiNapoli said. "These audits are tools for local officials to make sure proper policies and procedures are in place to protect taxpayer dollars and provide the best possible service these taxpayer dollars can deliver."

Town of Chautauqua – Fiscal Stress (Chautauqua County)
The town board did not develop reasonable budget estimates for the general town-wide fund and did not properly monitor and control actual activity against those estimates, allowing appropriations to be over-expended. As a result, the general town-wide fund experienced operating deficits in the 2010, 2011, and 2012 fiscal years. In addition, town officials have not developed a comprehensive multiyear financial plan to adequately address operational and capital needs.

Village of Fleischmanns – Water Fund (Delaware County)
The village board has consistently overestimated expenditures and revenues, which has caused fund balance to significantly decrease over the past two years. Capital expenditures were made to repair infrastructure and decrease water loss, however, no long-term capital plan has been put into place to address financial needs and further capital improvements.

Town of Forestport – Financial Management (Oneida County)
The town board needs to improve its budgeting practices and enhance its oversight of the town’s finances. At the end of 2012, fund balance in the general fund had increased to $741,000, or 67 percent of the ensuing year’s appropriations. In addition, the water and sewer districts were not properly funded, resulting in the general fund having to make interfund loans to these districts to support their operations.

Town of Grand Island – Internal Controls Over Fuel Purchases (Erie County)
The town board did not establish procedures to help ensure that fuel was dispensed only into town vehicles by authorized employees. There were no procedures in place to regularly monitor fuel transactions for reasonableness and ensure that only authorized employees were provided with a user ID. As a result, a former employee was able to make more than 100 unauthorized transactions at a cost of nearly $5,000 to the town.

Town of Hartwick – Financial Condition (Otsego County)
The town board did not establish reasonable financial plans for three of its major operating funds. Between 2009 and 2012, Town officials made $550,000 in unplanned transfers to the highway fund and $20,000 to the fire protection fund to keep those funds solvent. The reliance on the general fund to subsidize these funds resulted in the depletion of the general fund’s year-end fund balance from $780,195 in 2009 to $220,688 in 2012.

Locust Valley Water District – Budgeting (Nassau County)
From 2009 through 2012, the district board frequently over-estimated budgeted expenditures and appropriated fund balance which was not fully needed to finance district operations. The board also appropriated more fund balance than was available to balance three of the four ensuing years’ budgets.

Town of Lyndon – Purchasing (Cattaraugus County)
The town board did not adopt a procurement policy as required. Instead, the board annually adopted resolutions requiring that it approve all purchases costing more than $1,500. The resolutions, however, did not satisfy the requirement to adopt a written procurement policy, where the board would specify the number of written or verbal quotes or bids to be obtained for various dollar thresholds.

Town of Lyonsdale – Financial Condition, Board Oversight and Controls Over Fuel Inventory (Lewis County)
The financial condition of the town’s highway town-wide fund had a deficit balance of $12,600 at the end of 2012. This decline in fund balance was caused by the town board not adopting realistic budgets and effectively monitoring budgets throughout the year. The board has not established an effective claims auditing process to ensure all claims reviewed and approved by the board contain adequate support to substantiate that they are proper town expenses. Auditors also found the town is unable to account for approximately 2,510 gallons of fuel valued at approximately $8,500.

Village of Pulaski – Selected Village Operations (Oswego County)
The village board disbursed $102,275 from the water system improvement reserve to pay for work associated with the River Street retaining wall project. However, because this reserve was set up as a capital reserve for the improvement of the water system, expending moneys from this reserve for other than its intended purpose was an inappropriate use of the reserve.

Town of Somers – Justice Court (Westchester County)
Auditors found weaknesses in the court’s internal controls and a lack of oversight of the court’s operations by the justices and the town board. The court clerks performed all of the key aspects of the court’s accounting function with limited oversight. Deposits were not always made and monthly reports were not always submitted in a timely manner. There is an increased risk that court funds could be misappropriated without detection or correction.

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For access to state and local government spending and nearly 50,000 state contracts, visit http://www.openbooknewyork.com/. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

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