Audit Objective
Did Great Neck Park District (District) officials properly record and account for capital assets?
Audit Period
January 1, 2023 – August 31, 2024
Understanding the Audit Area
A park district’s (district’s) capital assets represent a significant investment of resources, and these assets need to be actively managed to ensure that they are adequately protected. Detailed records help to establish accountability and provide the board of commissioners (board) and district officials with the information needed to develop additional controls and safeguards. Such processes should be outlined in detailed policies and procedures.
The recorded historical cost for the District’s capital assets totaled approximately $51.2 million as of December 31, 2023, with machinery and equipment representing approximately $9.2 million (18 percent) of the total amount.
Audit Summary
District officials did not properly record and account for all the District’s capital assets. Without accurate and up-to-date inventory records, District officials cannot ensure that all equipment is accounted for and easily located, which increases the risk that equipment could be lost, stolen or misused.
Our audit determined that while the Finance Director and senior accountant shared the responsibilities of the property control manager, the Board of Commissioners (Board) did not officially appoint one person as property control manager to be responsible for tracking the District’s capital assets, ensuring the accuracy of asset records and establishing detailed procedures for protecting capital assets. Additionally, the Board did not adopt a comprehensive capital asset policy to ensure officials properly recorded and accounted for equipment. As a result, there was a lack of clear guidelines for officials to track capital assets, increasing the risk of errors within the inventory records and the potential misuse of the District’s equipment.
The Finance Director developed capital asset procedures without having a full understanding of how the District’s asset and maintenance management software was used. He also did not distribute the procedures to the Board, Superintendent or park supervisors. As a result, the park supervisors tracked equipment based on their understanding of verbal procedures provided by the Finance Director. This created a disconnect between the written procedures and the duties being performed by officials, and the District had an increased risk that its capital assets could be lost, stolen or misused. For example, the park supervisors stated that they were unaware of any District procedures requiring a barcode label to be affixed to capital assets (i.e., equipment), and they did not physically tag equipment or record tag information on the inventory list.
We reviewed all 30 equipment assets purchased during our audit period, which had a combined acquisition value of $231,945, and determined that these items were generally recorded on the inventory list. We also selected 50 assets categorized as machinery and equipment from the inventory list with a combined acquisition value of $560,075 that had been purchased prior to January 1, 2023, and reviewed them to determine whether the assets were in the District’s possession and properly tagged. We could not determine whether three of the 50 items with a combined acquisition value of $3,605 were in the District’s possession, including a popcorn machine that may have been disposed of, a laptop that was stolen and a snowblower with incorrect information in the inventory records.
Finally, the Finance Director has not conducted a physical inventory of park equipment since 2012. The park supervisors were also unaware of the District’s procedures for conducting annual inventories. Consequently, the park supervisors did not conduct an annual physical inventory of the assets they were responsible for at their respective parks. Had the Finance Director, senior accountant or park supervisors conducted an annual inventory and reconciled the results to inventory records, they could have identified and corrected the discrepancies identified in this report, including determining whether the 246 assets with a $0 acquisition value on the inventory list met the threshold to be included in the inventory records and/or items had been disposed.
This report includes eight recommendations that, if implemented, will improve the District’s processes for recording and accounting for capital assets. District officials generally agreed with our recommendations and their response is included in Appendix B.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC) authority as set forth in Article 3 of the New York State General Municipal Law (GML). Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of the GML. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in the Clerk’s office.