New York State Comptroller Thomas P. DiNapoli today announced the following local government audits were issued.
Town of Sherburne – Budgeting (Chenango County)
The budgets adopted by the board underestimated revenues and overestimated expenditures. In addition, officials appropriated fund balance to balance the budgets because purported revenues were not sufficient to fund operations. However, operating surpluses occurred which resulted in an unplanned increase in fund balance. Furthermore, the board did not have written multiyear capital or financial plans or a written fund balance or reserve policy in place to guide the board’s decisions regarding appropriate fund balance and reserve fund levels. As a result, more taxes may have been levied than were needed to fund the town’s operations.
Yates County – Court and Trust Funds
The treasurer delayed turning over $44,940 of abandoned property to the State Comptroller for three years. In addition, the county clerk’s register did not include one court and trust action totaling $38,253 identified in the treasurer’s records. Lastly, the surrogate’s court register did not include an action ordering the deposit of $6,867 with the treasurer during 2017.
Town of West Seneca – Audit Follow-Up (Erie County)
The purpose of this review was to assess the town’s progress, as of December 2024, in implementing recommendations in a March 2020 audit. The audit determined that the board did not properly plan and manage a certain capital project and was not fully transparent on the anticipated project costs. As a result, original estimates of $9.8 million were increased by more than $3.6 million after competitive bids were received. In addition, town officials did not ensure an itemized project budget outlining revenues and expenditures was maintained in the accounting records. The audit included four recommendations to help officials monitor and improve the town’s capital project management, none of which were implemented.
Town of Perth – Conflict of Interest (Fulton County)
A board member was the sole proprietor of an automotive company that did business with the town. Therefore, the board member had a prohibited conflict of interest, which means they did not follow state law and the town’s code of ethics. The prohibited interest occurred when the board member’s business repaired a town dump-truck and was paid $13,183 for the repair. The board member with the prohibited conflict of interest, the town supervisor, and another board member approved the $13,183 payment. According to the board member with the conflict of interest, he approved the claim because two board members refused to approve the claim due to their concerns with his prohibited conflict of interest. The town supervisor stated he approved the claim because the repair work was completed so the town had an obligation to pay. Although the town supervisor, who is a member of the town’s board of ethics, had concerns with the payment, he was unable to provide a reasonable explanation for why he did not bring this matter to the board of ethics. The remaining board member approved the claim because the town supervisor had approved it.
Town of Perth – Supervisor’s Records and Reports (Fulton County)
The supervisor did not maintain complete, accurate and timely accounting records or provide adequate financial reports to the board. For example, as of March 31, 2024 the general fund was overstated by $584,018 and the highway fund was understated by $123,066. As a result, the board lacked reliable records and reports to manage the town’s financial operations. The supervisor also did not prepare any monthly bank reconciliations during our audit period and the adjusted bank balances did not agree with the cash balance from the accounting records. The general fund and the highway fund cash balances as of March 31, 2024 were overstated by a combined total of $460,952. The issues identified may have been detected had the board annually audited the supervisor’s records as required by state law.
Montauk Fire District – Payroll – Advanced Life Support (ALS) Employees (Suffolk County)
The board overpaid its 13 ALS employees a total of $9,386. A lack of oversight and inadequate controls led to the overpayments occurring. The district’s inconsistent time records and the secretary-treasurer not reconciling time records before processing payroll enabled three ALS employees to overlap their shifts at the district and the neighboring Amagansett Fire District. Had the chairman of the board, who was responsible for reviewing the payroll, checked the calculations or verified that ALS employee hourly rates were correct before certifying the payroll each pay period, the payroll calculation errors may have been identified and corrected.
Town of Wawayanda – Financial Operations (Orange County)
The board and town officials did not properly manage financial operations, and the board did not provide adequate oversight. The board adopted unrealistic budgets. For example, the board continuously adopted budgets that underestimated revenues by approximately $5.2 million and appropriated $2.2 million of fund balance that was not needed to fund operations during the audit scope period. The board did not effectively manage the town’s fund balance over the last five fiscal years, resulting in operating surpluses that increased unrestricted fund balance from $4.3 million for all funds to $7.7 million as of the end of 2023 or 118% of the 2024 appropriations. The board also did not adopt a fund balance policy. Therefore, no rationale was established for maintaining this level of unrestricted fund balance. As a result, real property tax obligations for town residents were likely higher than necessary.
Auburn Industrial Development Authority (AIDA) – Project Approval and Monitoring (Cayuga County)
The board and AIDA officials did not properly approve and monitor projects. The board and AIDA officials did not review all supplemental documentation for project approval or properly monitor the 16 active projects. AIDA officials did not require project owners to submit supporting documentation for capital investment and job data with applications and ensure project owners submitted the required annual reporting form and supporting documentation needed to monitor project goals, including job retention and creation. In addition, AIDA officials did not conduct policy-required site visits in 2023 and 2024. As a result, the board and AIDA officials did not adequately monitor job creation and retention and did not determine the reasons for all of the variances between 2023 year-end jobs and project goals or document their assessments.
Village of Hudson Falls – Information Technology (IT) (Washington County)
The village board and officials did not establish adequate controls to safeguard IT systems or develop adequate IT policies or procedures. In addition, the board did not develop and adopt an IT contingency plan to help minimize the risk of data loss or suffering a serious interruption of services, periodically test backups or provide IT security awareness training. As a result, village officials cannot be assured that village IT systems are secured and protected against unauthorized use, access and loss, and there is an increased risk that officials could lose important data and suffer a serious interruption in operations.