The city of Mount Vernon faced financial uncertainty and problems because it lacked critical operational controls over finances, electronic banking, purchasing goods and services and segregating financial duties, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. The audit provided a detailed account of the millions in expenses that were not timely paid, inappropriate actions by the former city comptroller and poor disclosure that caused the city financial troubles and ongoing legal issues.

DiNapoli made 29 recommendations to overhaul the operations of the city comptroller’s office and establish necessary oversight policies and procedures to prevent future problems.

“The lack of operational controls and failure by the former city comptroller to complete basic financial functions contributed to Mount Vernon’s fiscal crisis,” DiNapoli said. “It is time for city officials to turn the page and overhaul their fiscal operations. I am encouraged by the response of Mayor Patterson-Howard and the city council and urge them and the new city Comptroller Darren Morton to act immediately to implement our recommendations.”

The audit covered disbursements, excluding payroll, from the period of Jan. 1, 2018, to Sept. 30, 2020, including trend analysis, a review of unpaid bills and legal issues. The audit is broken up into two major sections: oversight of payments and the comptroller’s responsibilities.

Key findings include:

• 88 claims totaling $1.8 million were not paid in a timely manner.
• 60 claims totaling $460,584 were not paid for essential services and infrastructure.
• The city lacked adequate policies and procedures to ensure claims were properly authorized, for valid purposes and paid in a timely fashion.
• Officials and employees did not have clear guidance on how the disbursement process worked.

Auditors also found the former city comptroller:

• Implemented a manual voucher system that restricted the ability of officials and employees to monitor operations and prevented officials from accounting for committed funds and determining whether vouchers had been paid.
• Made 25 unauthorized electronic disbursements and three withdrawals totaling $16.4 million, most of which circumvented the mayor’s required countersignature of checks.
• Used contingency appropriations to pay for $1.3 million in expenditures without the city council’s knowledge or approval.
• Disregarded city policies and retained outside counsel, and then failed to seek reimbursement for more than $7,500 in payments to this outside counsel in violation of a court order.

The mayor and city council agreed with the audit’s findings and said they would work with the new city comptroller to undertake a series of changes in response to the audit. Their full responses are included in the audit.

Audits
City of Mount Vernon – Non-Payroll Disbursements (2021M-163) Audit
City of Mount Vernon – Financial Reporting and Oversight (2020M-96) Audit

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