Audit Objective
Did the Town of Edinburg (Town) Supervisor (Supervisor) maintain complete, accurate and current accounting records and reports?
Audit Period
January 1, 2024 – January 31, 2025
We extended our audit period back to December 31, 2018 to review the dates on which the Town filed its annual financial report (AFR).1
Understanding the Audit Area
A town supervisor must maintain complete, accurate and current accounting records and reports for informed decision-making, legal compliance and accountability. These records are essential for a town board and officials when monitoring a town’s financial health, making sound fiscal decisions, ensuring that the town complies with various laws and maintaining the public’s trust.
The Town Board’s (Board’s) 2025 calendar-year fund appropriations (general, highway and fire protection) totaled $2,119,755.
Audit Summary
The former Supervisor, who resigned in October 2024, did not maintain a central accounting system to track the Town’s financial activity, which caused the Town’s accounting records and reports to be incomplete, inaccurate and outdated. Without an effective accounting system, the former Supervisor could not generate and submit routine financial reports (including budget-to-actual, balance sheet and reconciled cash balance reports) to the Board.
The former Supervisor also did not prepare monthly bank reconciliations or maintain check registers with running cash balances for the Town’s checking accounts, which included departmental remittances from the Town Clerk, Town Justice and Tax Collector. As a result, the Board and Town officials did not have the information they needed to effectively manage the Town’s financial operations. This also caused the Town to have an increased risk that unauthorized or inappropriate transactions could occur and remain undetected.
In January 2025, the Town hired a bookkeeper, and the current Supervisor began working with her to set up a new accounting system and reconstruct the prior years’ accounting records.
We examined available supporting records2 for the 2024 fiscal year to determine whether the Town had sufficient cash balances and whether significant revenues and disbursements were properly supported. We did not identify any transactions that were not for a Town purpose, and the Town did not appear to be fiscally stressed.3 For example, as of December 31, 2024:
- The general fund had a total unrestricted adjusted cash balance of $1,852,145. This amount represented 184 percent of the ensuing year’s budgeted appropriations of $1,007,328.
- The highway fund had a total unrestricted adjusted cash balance of $421,472. This represented 43 percent of the ensuing year’s budgeted appropriations of $983,171.
However, without a central accounting system, transfers between Town bank accounts were not adequately monitored to ensure that each fund properly funded its respective expenditures. For example, the highway fund incurred $263,016 in 2024 payroll expenditures that were processed and paid from the general fund payroll clearing account. However, the highway fund transfers to the general fund payroll account totaled only $108,374 as of December 31, 2024. As a result, the highway fund owed $154,642 to the general fund.
The former Supervisor could not file the Town’s AFRs for the 2019 through 2023 fiscal years because she did not maintain adequate accounting records. As a result, Town officials were not transparent with taxpayers. While the former Supervisor filed the 2018 AFR, it was not filed in a timely manner.
Furthermore, the Board did not audit, or contract for an audit of, the Supervisor’s records and reports as required by New York State Town Law (Town Law) Section 123.Had the Board performed the required audits, the Board and Town officials would have identified the deficiencies in the Town’s accounting records.
The report includes five recommendations that, if implemented, will improve the Town’s management of financial operations and reporting. Town officials agreed with our recommendations and indicated that they have plan to 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 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 Town Clerk’s office.
1 According to New York State General Municipal Law (GML), local governments must submit an AFR to the New York State Office of the State Comptroller (OSC) within 60 to 120 days of the end of their fiscal year, depending on the type of local government. This document contains information related to the local government’s financial condition, including a balance sheet, statement of revenues and expenditures/expenses and changes in fund equity for each fund; summary budget information; statement of cash flows for proprietary funds; statement of indebtedness for outstanding bonds and notes; and pertinent schedules of supplemental information.
2 Refer to Appendix C for further information on our sample selection.
3 According to OSC’s Fiscal Stress Monitoring System (FSMS), to not be fiscally stressed means that a local government or school district has sufficient revenues to meet its expenditures, a reasonable amount of fund balance and adequate cash reserves, which would allow it to manage short-term financial pressures and plan for the future. Follow this link for more information about FSMS: https://www.osc.ny.gov/files/ local-government/fiscal-monitoring/pdf/system-basics.pdf