Audit Objective
Did the Town of Spencer (Town) Board (Board) provide adequate oversight of non-payroll disbursements?
Audit Period
January 1, 2023 – September 30, 2024
Understanding the Program
The Town paid 647 non-payroll disbursements totaling approximately $2.1 million during the audit period. It is the responsibility of the Board to conduct a thorough and deliberate audit of claims before payment authorization. An effective claims audit process can help ensure that tax dollars are spent properly, efficiently and in the best interest of taxpayers.
Audit Summary
The Board did not conduct a thorough and deliberate audit of all claims paid during the audit period. As a result, we identified claims being paid without the Board’s knowledge. We reviewed all 647 non-payroll disbursements made during the audit period totaling approximately $2.1 million and identified the following:
- Sixty-nine disbursements totaling $248,900 that were not included on a Board-approved abstract, which is a list of all claims that have been audited and approved for payment.
- Sixteen disbursements totaling $32,100 in which the amount approved on the Board-approved abstract did not match the amount disbursed on the canceled check image.
In addition, we reviewed 123 of these disbursements totaling $262,100 to determine whether they were properly supported and found thirty-three disbursements totaling $28,100 lacked adequate detail for the Board to complete a thorough claims audit. For example, although the Highway Department received detailed invoices of individual purchases showing item detail and cost per unit, the Board was provided with monthly summaries which referenced these invoices but lacked adequate detail to determine what was purchased.
When claims are not audited or lack sufficient support, there is an increased risk that inappropriate disbursements could be made without the Board’s knowledge. Furthermore, when the dollar amounts of disbursements made do not match the Town’s records, the transparency of actual amounts paid for Town operations is diminished to taxpayers and residents.
In addition, Highway Department employees circumvented the disbursements process for 12 purchases totaling $4,500 by using a credit account established with a local vendor who sold metal products without the Board’s approval and review.The Highway Department sold scrap metal to the vendor for which the Town received credit on the account for future metal purchases from the vendor.The account had a remaining credit balance of $8,700 with the vendor as of September 25, 2024.The use of credit accounts without Board oversight increased the risk of misuse or misappropriation of Town funds.
The report includes nine recommendations that, if implemented, will improve the Town’s disbursements process.Town officials generally agreed with our recommendations and indicated they will initiate corrective action.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law.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 New York State General Municipal Law.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 Town Clerk’s (Clerk’s) office.