State auditors find former Sodus Town Clerk embezzled town funds

State auditors find former Sodus Town Clerk embezzled town funds
Source: Office of the State Comptroller

An audit report released on August 10, 2010 by New York State Comptroller Thomas P. DiNapoli indicates that a former Sodus town clerk embezzled approximately $50,000 during the period January 1, 2008 to September 28, 2009.

The Comptroller’s audit was limited to a review of the clerk's monthly and annual reports and did not include an examination of the books, records, cancelled checks and check images.

The auditors found that when collecting taxes, water rents and clerk fees, the clerk took some of the cash payments and used the interest and penalties paid by others to cover the amounts taken.

In addition, the auditors noted that the board had not establish adequate policies and procedures to safeguard computerized data and assets.

The Comptroller's audit states that the objective of the audit was to determine if the former Town Clerk was properly recording, reporting and distributing all moneys received by her office for the period January 1, 2008 to September 28, 2009 and addressed the following related questions:

1. Did the former Town Clerk record, deposit, disburse and report all clerk fees, real property
taxes and water rents that she received in a timely and accurate manner?

2. Did the Board implement adequate internal control policies and procedures to protect and
account for Town assets?

The Auditors found that the former Town Clerk did not accurately record and deposit all moneys collected, resulting in a shortage of over $50,000 and has admitted that she embezzled Town funds for the last eight years.

Additionally, the reports states that the Board retained the responsibility for examining the Town Clerk’s books and records but did not perform an adequate examination of the former Town Clerk’s supporting books, records, receipts, canceled checks or check images. The Board’s examination consisted only of reviews of the former Town Clerk’s monthly and annual reports.

As a result, the Board was not aware that the former Town Clerk did not keep complete and accurate records and reports of receipts and disbursements, perform regular and competent reconciliations of those records to the bank accounts, and properly deposit moneys and issue payments in a timely manner.

DiNapoli recommended the board and incumbent Town Clerk:

1. Take appropriate action to recover town monies from the former town clerk;

2. Adequately support and deposit all monies received into the proper accounts intact and in a timely fashion;

3. Reconcile accounts on a monthly basis and analyze and reconcile available cash with liabilities;

4. Perform or contract for a thorough annual examination of the town clerk’s financial operations; and

5. Adopt information technology policies and procedures that address user access rights.

The Comptroller’s office said that Town officials generally agreed with these recommendations and plan to take corrective action.

The complete text of the Comptroller's report is posted on the Internet at:
http://www.osc.state.ny.us/localgov/audits/towns/2010/sodus.pdf

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