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October 04, 2024

New York State Comptroller Thomas P. DiNapoli releases local government and school audits

On October 4, 2024, New York State Comptroller Thomas P. DiNapoli issued the following local government and school audits.

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Merrick Union Free School District – Financial Management (Nassau County)

The board and district officials did not properly manage fund balance and reserves. Although the board and district officials reduced surplus fund balance from 19% as of June 30, 2015 to 8% as of June 30, 2023, they consistently appropriated fund balance that was not needed and overfunded reserves, primarily through transfers of surplus fund balance. These practices lack transparency, circumvent the statutory limit on surplus fund balance and result in taxpayers being taxed more than necessary. Specifically, the board and district officials overestimated appropriations by an annual average of $1.7 million (3.3%). They also consistently appropriated an average of $1.6 million of fund balance that was not needed and could not demonstrate that the unemployment insurance and repair reserves, with balances totaling $2.9 million, were reasonably funded.

 

Panama Central School District – Procurement (Chautauqua County)

The board and district officials did not always comply with the district’s procurement policies or state law which generally requires purchase contracts that exceed certain thresholds to be competitively bid. In addition, the claims auditor did not perform adequate audits. As a result, $1.1 million in purchases (half of the procurements reviewed) were made without competitive procurement methods. Therefore, the board, officials and the claims auditor did not help ensure that district funds were used to procure goods and services in a prudent and economical manner and in the best interests of taxpayers. Furthermore, certain district officials delegated their procurement responsibilities to other individuals and did not ensure they adhered to the procurement policies and state law. The claims auditor also relied on other district officials to perform her job responsibilities and did not ensure district officials complied with the procurement policies and state law.

 

Village of Catskill – Accounting Records and Reports (Greene County)

The clerk-treasurer did not maintain complete and accurate accounting records and did not provide timely, accurate or adequate reports to the board. As a result, the transparency of the village’s financial operations was reduced, and the risk that unauthorized or inappropriate transactions could occur and go undetected increased. The clerk-treasurer made accounting errors totaling over $2.2 million and did not reconcile bank balances to the general ledger cash balances. As a result, there is a greater risk that errors and/or irregularities could occur. The clerk-treasurer also did not properly account for three bank account balances totaling $1.1 million on May 31, 2023 in the accounting records or comply with state law, all requiring annual financial reports (AFRs) be filed with the Comptroller’s Office. Further, the village board did not annually audit the clerk-treasurer’s records, as required by law.

 

Town of Pittsfield – Supervisor’s Records and Reports (Otsego County)

The supervisor did not maintain complete, accurate and up-to-date accounting records and reports. The supervisor did not properly record revenues in the accounting system, prepare bank reconciliations or provide detailed monthly fund balances to the town board. In addition, the supervisor did not file the town’s 2021 or 2023 AFR as required by state law and the 2022 AFR was inaccurate. The supervisor also did not provide the board with records for the annual audit, as required. Had the accounting records been presented to the board and the board members fulfilled the annual audit requirement and provided adequate oversight of the town’s financial operations, the accounting and reporting deficiencies may have been identified and corrected.

 

Cayuga County – Court and Trust Funds

Pursuant to a court order, certain assets may be provided to the court and then delivered to the county treasurer for safekeeping. Together, the treasurer, county clerk and surrogate’s court must develop sound procedures and processes which, when implemented properly and consistently, provide a system of internal controls to account for and safeguard these funds. Auditors found there was no reconciliation performed between the treasurer’s, county clerk’s and surrogate’s court’s records and three cases totaling $175,940 were excluded from the annual report. In addition, the court and trust register did not include two court and trust actions identified in the treasurer’s records.

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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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