Selected reports and information issued by New York State's Comptroller Thomas P. DiNapoli issued during the week ending August 22, 2015
DiNapoli: Former Le Roy Fire Dept Treasurer Sentenced For Gambling-Related Theft of $46,000
The Comptroller’s audit report of the Association of the Village of Le Roy Firemen’s Benevolent is posted on the Internet at:
Comptroller DiNapoli Releases Municipal Audits
Overall, the board properly managed the town’s finances. However, the board did not review the budget-to-actual status reports the comptroller provided and has not developed a multiyear financial plan.
The board provided adequate oversight of library finances. However, the board did not audit and approve claims from the private funds account prior to their payment. This increases the risk that errors or irregularities would not be detected and corrected.
The treasurer controls all aspects of the cash receipts and disbursements processes without any oversight or mitigating controls, such as independent review of his work. In addition, the company’s audit committee has not adopted policies or procedures for financial operations such as conducting fundraising activities, purchasing goods and services, and processing claims.
Prior to the commencement of the audit of the village, an audit of the town of Cohocton identified fraud linked to the former town clerk. During the audit of the town, village money was found deposited in a town account. The audit of the village revealed cash receipts were not properly safeguarded and accounted for in the treasurer’s office.
The board has not taken sufficient action to initiate new projects and encourage the creation or expansion of new business, significantly affecting CIDA’s viability. CIDA has not taken sufficient action to reduce expenditures.
The board did not ensure that the secretary included sufficient detail in the board’s meeting minutes, did not comply with town law relating to commissioner elections and did not properly document relevant payroll information. The district also has no policy regarding credit card usage. Auditors reviewed 177 food, travel and credit card expenditures totaling $86,337 and found that the board did not ensure that these expenditures were adequately supported and valid prior to approving them for payment.
Auditors found that four employees in 2013 and six employees in 2014 did not receive the correct gross pay. These employees had combined overpayments totaling $4,759 and combined underpayments totaling $852. In addition, state and federal income taxes were not withheld in accordance with employees’ withholding allowance certificates and the proper amounts were not deducted for health insurance premiums from any of the employees’ gross pay during the audit period.
Although the supervisor provided the board with accurate monthly budget-to-actual reports, the balance sheets included inaccurate account balances. Moreover, the last time the supervisor filed the annual financial report was for the 2010 fiscal year and the tax levy limit calculation has never been filed since the inception of the property tax cap law for the 2012 budget year.
Although board members followed town procedures when developing budgets, they consistently adopted unrealistic budgets. The board relied on one-time revenues to fund operations and used budget estimates that did not reflect historical trends. Further, the town-wide general and the town-outside-village highway funds had operating deficits for four straight years totaling $45,200 and $127,400.
The board allowed budget line items to be routinely over-expended and budget transfers to be made after the end of the fiscal year, rather than throughout the year when needed. The court clerk maintains up-to-date accounting records, however, the justices and village officials did not establish proper controls to ensure the court clerk properly accounted for all issued parking tickets.
The justices did not ensure that accurate monthly bank account reconciliations were being performed by the clerk, which should be part of their month-end accountability analysis. Furthermore, the justices did not deposit all collections in a timely manner.
The board needs to improve internal controls to effectively protect the town’s computer system and data. Specifically, the board needs to review user access and restrict administrative rights to those who need such rights to perform their jobs. Furthermore, the board has not developed computer security and disaster recovery plans, and has not established a breach notification policy or a comprehensive inventory policy for all hardware and software.
The board did not provide adequate oversight of the planning and execution of the stream restoration project. In addition, the board did not always ensure that county contracts were properly approved, monitored and paid. No procedures were taken to ensure the lowest possible cost was paid for 18 of 28 professional service contracts totaling $1.2 million.
The board does not review cash receipts, bank statements, canceled checks or bank reconciliations while conducting the annual audit, causing the audit to be ineffective. Also, the treasurer has not submitted the required annual financial reports to the Office of State Comptroller for the 2010 through 2014 fiscal years.
The board did not provide adequate oversight and management of the town’s financial operations within the town-wide general fund. Also, town officials have not developed policies and procedures to govern budgeting practices and the level of fund balance to maintain and have not communicated long-term plans for the building reserve to taxpayers.
Numerous bank account balances did not reconcile to their corresponding cash balances in the accounting records and had total differences ranging from $4,437 to $6,514 per month. In addition, the village filed its annual financial reports to the Office of State Comptroller late for 2011-12 fiscal year and has not yet filed its reports for 2012-13 or 2013-14 fiscal years.
Library officials did not always seek competition when procuring goods and services. For example, auditors found that officials paid a professional service provider and an insurance broker a total of $90,912 without soliciting competition.
The town justice generally ensures controls are in place to safeguard moneys, however, the justice does not ensure the clerk is pursuing collections of unpaid traffic tickets. As a result, the court had 17 unpaid tickets during the audit period that represent $2,900 in uncollected fines and fees.
The board did not properly plan and provide sufficient oversight and management of the village hall building project. As a result, the second floor of the building is incomplete and unusable more than three years since the start of the project. In addition, the board needs to improve its oversight of village financial operations. Auditors found the former mayor increased his annual salary without the board’s formal authorization.