Audits of municipalities issued by the New York State Comptroller Thomas P. DiNapoli during the week ending July 5, 20114
Source: Office of the State Comptroller
Auditors commended the town justices for establishing strong internal controls over court operations. The justices implemented specific controls to ensure court money collected was properly recorded in the court records, deposited in a timely manner and accurately reported to the Justice Court Fund.
Village officials need to improve internal controls to ensure water, sewer and electric user charges are properly billed, collected, recorded and deposited. The duties for billing, collecting and recording payments are not segregated. Also, customer account adjustments are not independently approved and the computerized billing system does not provide an audit log to show adjustments that have been made.
Internal controls over the claims audit process were not appropriately designed to protect and account for library assets. Although one board member reviewed claims as a part of the check-signing process, they were not reviewed by other members. Additionally, the board member who reviewed the claims did not document his review and approval by signing the claims.
The town clerk remitted tax collections to the town and the county up to two months late and returned duplicate payments eight months after the payment was made. The clerk did not routinely indicate the form or date of payment on tax stubs/receipts and made deposits on average nine days late. In addition, the town board has not performed an annual audit of the clerk’s records.
The board reviewed each claim presented for audit and approval, however, they did not ensure that claims included the necessary documentation. Paid claims lacked proper itemization and documentation to indicate they represented actual and necessary town expenses.
Auditors found that most of the significant revenue and expenditure projections in the tentative budget for the general, sanitation, water and sewer funds are reasonable. The tentative budget did not include a tax overlay or provisions for potential salary increases from contract settlements. These issues could cause the village to become fiscally stressed or require an increase in taxes.
Newstead Fire Company – Internal Controls Over Financial Activities (Erie County)
The treasurer maintained appropriate financial records, performed monthly bank reconciliations, and submitted monthly financial reports to the board. However, the board did not oversee fundraising activities, properly authorize disbursements or review the treasurer’s reconciled bank statements.
Reliance on appropriated fund balance as a financing source in the 2011 and 2012 fiscal years resulted in a significant reduction in the city’s general fund balance and unassigned fund balance. Beginning in the 2013 fiscal year, city officials took steps to replace fund balance. Based on the city’s revenue increases and cost-saving measures adopted in 2013, it appears that officials are properly managing the city’s financial condition.
The town’s procurement process was generally effective for obtaining goods and public works contracts subject to the policy’s bidding thresholds. In most instances the town purchased equipment and commodities through state or county contracts or by competitively bidding. However, officials did not develop and follow formal procedures for obtaining professional services..