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April 25, 2020

Municipal audits issued during the week ending April 24, 2020

On April 24. 2020, New York State Comptroller Thomas P. DiNapoli announced the following local government audits have been issued.

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The board did not adequately oversee the treasurer’s work or require annual audits of the treasurer’s records and reports. Auditors also found that the treasurer did not provide regular financial reports to the board or maintain adequate accounting records. In addition, the treasurer did not file Annual Update Documents (AUDs), which are the required annual financial reports, with the Office of the State Comptroller (OSC) or the board in a timely manner.

The board did not develop and manage a comprehensive investment program to ensure interest earnings were maximized. Also, village officials did not solicit interest rate quotes from additional financial institutions or prepare any cash flow forecasts to estimate the amount of funds available for investment. Had officials invested available funds in a financial institution with higher available interest rates, interest earnings could have been increased by approximately $42,200 during the audit period.

The Village lacked effective procedures to ensure water and sewer charges were accurately billed, collected and enforced. Board-adopted water rates were incorrectly set up in the billing and collection software. Customer bills were not accurately prepared. As a result, the customers auditors reviewed were underbilled by $4,758 and overbilled by $235. In addition, delinquent customer accounts were not always assessed penalties in accordance with the board-adopted local laws. As a result, based on the delinquent customer accounts auditors reviewed, the Village lost revenue totaling $3,244.

Auditors found that significant revenue and expenditure estimates in the tentative budget are reasonable. The village budgeted approximately $2.13 million in metered water revenue and $2.67 million in sewer rent revenue. However, based on collections of water and sewer rents in prior years, auditors estimate the total 2020-21 collections for water and sewer revenue will be approximately $1.94 million and $2.38 million, respectively, which is approximately $190,000 less than budgeted for water revenues and approximately $290,000 less than budgeted for sewer revenues. The tentative budget includes a tax levy of $12,426,613 which is $471,753 above the limit established by law.

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NYPPL Blogger Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
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