Municipal and school audits issued

On July 19, 2024, New York State Comptroller Thomas P. DiNapoli announced the publication of the local government and school audits listed below.

Click on the text in color to access the complete text of the audit for the jurisdiction.

 

Town of Stafford – Capital Projects (Genesee County)

The board did not properly authorize and monitor capital project activity. Because the board relied on an engineering firm and a financial advisor to manage capital projects, it was not aware of project overruns, cash flow issues or financing source shortfalls. Moreover, a portion of the costs to construct water districts was unfairly paid for by taxpayers not living in or receiving benefit from these water districts. The board and supervisor also did not maintain adequate capital project accounting records or include eligible expenditures totaling $3,496 in the grant reimbursement applications. As a result, the town received less funding than it was entitled to.

Town of Lancaster – Town Supervisor’s Financial Duties (Erie County)

The former supervisor did not perform his financial duties and did not monitor the work performed by the firm he improperly contracted with to act as director of finance, resulting in incomplete and inaccurate financial records and significant control weaknesses. Monthly financial reports were not generated and provided to the board and bank reconciliations were not completed promptly. Auditors found 86 budget lines were overspent by nearly $9.2 million and 21 budget transfers totaling $483,122 were completed without board approval. They also found 76% of journal entries were made 70 days after the transaction took place and 60% of journal entries were approved by the firm without the supervisor’s review. The supervisor also compromised the security of the town’s resources by granting unrestricted access to the financial system and online banking to the firm, a third party. He did not ensure proper segregation of duties or put other controls in place, which allowed the firm to disburse $2.5 million of the town’s cash without any town official’s approval. The supervisor and other board members were unaware of these deficiencies and continued to pay the firm even though the contract terms were not fulfilled.

Franklin-Essex-Hamilton Board of Cooperative Educational Services – Capital Project State Aid

BOCES officials did not properly claim state aid for a capital project. As a result, as of Jan. 31, 2024, five component school districts had not received $652,054 in state aid they were entitled to for the project, and two districts received $916,278 in aid before being entitled to it. In addition, if officials do not claim approximately $1.5 million in eligible project expenditures, seven districts will not benefit from approximately $835,000 in state aid to they should receive.

Rensselaer City School District – Medicaid Reimbursements (Rensselaer County)

District officials did not submit claims for all Medicaid-eligible services provided to students and did not correct and resubmit rejected claims. The district also lacked adequate procedures to ensure Medicaid claims were submitted and reimbursed. As a result, claims were either not submitted or reimbursed for just over 1,260 eligible services totaling $46,338. Had the district claimed all eligible services, it would have realized revenues totaling $23,169.

Town of Franklinville – Procurement (Cattaraugus County)

Town officials did not always comply with the requirements of the town’s procurement policy because the board members, highway superintendent and former town supervisor, who served as the town’s chief financial officer, were not familiar with the town’s procurement policy and its requirements. Further, they did not research publications or attend free training that was available to assist them in their procurement responsibilities. As a result, $827,000, or 41%, of the $2 million in procurements reviewed were made without competitive procurement methods.

City of Yonkers – Budget Review (Westchester County)

The city’s adopted budget for fiscal year 2024-25 and supporting documents are in compliance with the requirements of state law. The city’s 2024-25 budget totals $1.51 billion, which includes operating and debt service funding of $794.2 million for Yonkers Public Schools and $719 million for the city. The 2024-25 budget is $81.2 million more than the city’s budget for 2023-24, an increase of 5.7%. The budget relies on nonrecurring revenue of $133.5 million, such as appropriated fund balance, one-time state and federal funding and sale of property, to balance its budget. The city could face a total shortfall of approximately $2.6 million if revenue estimates are not realized. The city plans to borrow up to $15 million for tax certiorari settlements in the 2024-25 fiscal year. Overtime costs could potentially be underestimated for police by as much as $2 million and for firefighting by as much as $131,000. Employee retirement costs are likely underestimated by as much as $945,000. Life, health and dental insurance costs could potentially be underestimated by as much as $195,000. Social security costs could potentially be underestimated by as much as $194,000.

Village of Elmira Heights – Claims Auditing (Chemung County)

Although state law requires a village board to audit all claims against a village before payment is made, the board did not perform a thorough and deliberate audit of individual claims, increasing the risk that improper payments could be made. Although the 213 claims reviewed totaling $771,282 were for proper village purposes, auditors determined that 34 claims totaling $143,560 were improperly paid before board approval and 11 claims totaling $34,987 lacked evidence that verbal or written quotes were obtained as required by the village’s procurement policy.

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