Audit Objective
Did the Town of Newcomb (Town) Supervisor (Supervisor) maintain complete and accurate accounting records and reports?
Audit Period
January 1, 2024 – September 30, 2025
Understanding the Audit Area
A town supervisor, as chief fiscal officer, should maintain complete and accurate accounting records and reports for informed decision-making, legal compliance, accountability and transparency. These records are essential for a town board and officials when monitoring a town’s financial health, making informed financial decisions and protecting public funds.
The Town’s accounting records included five operating funds during the audit period: general, highway, water district, sewer district and fire protection district. The Town’s 2025 budgeted appropriations for these funds totaled approximately $6.5 million. During the audit period, the Town also had an active capital project for constructing a community center that was accounted for in a capital projects fund in the accounting records.
Audit Summary
The Supervisor did not maintain complete and accurate accounting records and reports. As a result, the Town Board (Board) and Town officials could not determine or manage the Town’s true financial condition. This also impaired the Board’s ability to make informed financial decisions and caused taxpayer inequities.
Although the Supervisor delegated his records and reports duties to an appointed Clerk to the Supervisor (Clerk), the Supervisor remained responsible for ensuring they were properly maintained. However, the Supervisor did not adequately oversee or monitor the responsibilities he delegated to the Clerk. As a result, errors and deficiencies in the Town’s accounting records and reports occurred, including the following:
- The balance sheets for the general, highway, water district, sewer district and capital project funds only contained asset accounts for cash and investments and no liability accounts as of December 31, 2024. However, the balance sheets for these funds should have contained receivables, prepaid expenses and accounts payable balances totaling a combined $834,594, $103,864 and $192,435, respectively.
- Expenditures for New York State and Local Employees’ Retirement System (NYSLRS) contributions were not recorded based on the actual expenditures incurred by the Town or properly allocated to each of the operating funds in 2024, which resulted in the recorded expenditures being overstated for the general fund by $22,772 and understated for the highway, water district and sewer district funds by $8,547, $1,935 and $1,541, respectively.
- Bank reconciliations were not prepared for all accounts or properly reviewed. For 14 of the 42 bank reconciliations (33 percent) that we prepared, the adjusted bank balances did not agree with the general ledger cash or investment balances at month’s end, including the general ledger balance exceeding the adjusted bank balance for one account by $38,779.
- The Supervisor did not provide the Board with complete and accurate monthly reports during the audit period. For example, the three-monthly reports we reviewed had 15 cash and investment balances that were overstated by amounts up to $85,997 and 12 balances that were understated by amounts up to $259,908.
- The 2024 Annual Financial Report (AFR) was incomplete and inaccurate because it was prepared using the Town’s incomplete and inaccurate accounting records. For example, the general and highway funds’ reported unrestricted fund balances were overstated by $119,311 and $97,317, respectively.
The Supervisor also did not provide an annual accounting to the Board for 2024, and the Board did not audit, or contract with an independent public accountant to audit, the Supervisor’s records for 2024. This annual accounting would have helped the Board fulfill its overall fiscal oversight responsibilities by providing it with an opportunity to assess the reliability of the books, records and supporting documents. Had the Board performed the annual audit, it may have observed the deficiencies that we identified during the audit and corrected them in a timely manner.
The report includes eight recommendations that, if implemented, will improve the Supervisor’s recording and reporting of financial transactions. Town officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.
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 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.