Audit Town 2016 - Office of the New York State Comptroller

Division of LocaL Government & schooL accountabiLity

o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r

report of ExaminationPeriod Covered:

January 1, 2012 — December 31, 2013

2015M-159

Town of AlexandriaMisappropriation of

Cash Receipts

thomas p. Dinapoli

Page

AUTHORITY LETTER 1

INTRODUCTION 2 Background 2 Objective 3 Scope and Methodology 3 CommentsofLocalOfficialsandCorrectiveAction 3

MISAPPROPRIATION OF CASH RECEIPTS 5 Cash Receipts 9 Board Oversight 11 Recommendations 12

APPENDIX A ResponseFromLocalOfficials 13APPENDIX B AuditMethodologyandStandards 16APPENDIX C HowtoObtainAdditionalCopiesoftheReport 18APPENDIX D LocalRegionalOfficeListing 19

Table of Contents

11Division of LocaL Government anD schooL accountabiLity

State of New YorkOffice of the State Comptroller

Division of Local Governmentand School Accountability March2016

DearTownOfficials:

A toppriorityof theOfficeof theStateComptroller is tohelp localgovernmentofficialsmanagegovernment resources efficiently and effectively and, by so doing, provide accountability for taxdollarsspenttosupportgovernmentoperations.TheComptrolleroverseesthefiscalaffairsoflocalgovernmentsstatewide,aswellascompliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversightisaccomplished,inpart,throughouraudits,whichidentifyopportunitiesforimprovingoperationsandTownBoardgovernance.Auditsalsocanidentifystrategiestoreducecosts and to strengthen controls intended to safeguard local government assets.

Following is a report of our audit of the Town ofAlexandria, entitledMisappropriation of CashReceipts.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.

This audit’s results and recommendations are resources for local government officials to use ineffectivelymanagingoperationsand inmeeting theexpectationsof their constituents. Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedat the end of this report.

Respectfullysubmitted,

Office of the State ComptrollerDivision of Local Governmentand School Accountability

State of New YorkOffice of the State Comptroller

2 Office Of the New YOrk State cOmptrOller2

Background

Introduction

The Town of Alexandria (Town) is located in Jefferson County(County)andhasapopulationofapproximately4,100residents.TheTownprovidesservicestoitsresidents,includingstreetmaintenanceand improvements, snow removal,parksand recreation,water andsewerservices,wasteandrecyclingdisposalandgeneralgovernmentsupport. TheTown’s appropriations for the 2014fiscal yearwereapproximately $3.7 million, funded primarily with real propertytaxes,sales tax,Stateaidanduserfees. TheTownisgovernedbytheTownBoard(Board),whichiscomposedoftheTownSupervisor(Supervisor)andfourBoardmembers.TheBoardisresponsibleforthe general management and control of Town finances, includingthe oversight of department heads and department finances. TheSupervisor,whoservesastheTown’schieffiscalofficer,isresponsiblefor maintaining the Town’s accounting records.

TheelectedTownClerk (Clerk)collects fees for licenses,permits,vital statistics and water and sewer services. The Clerk also serves as the Town’s Tax Collector and collects both Town and Countyreal property tax payments in that capacity. In addition, theClerkreceives moneys from other Town officials including the transfersiteattendant,arenadirector,youthprogramdirectorandSupervisor.The Clerk deposits these moneys into the Town’s general fund bank account on behalf of the Supervisor. The Clerk writes the revenue source on each duplicate deposit slip and provides the deposit slip tothebookkeeper,whorecordstherevenuesinthefinancialrecords.

ADeputy Clerk (Deputy) assists the Clerkwith performing someofherdutiesandismainlyresponsibleforcollecting,recordinganddepositingwaterandsewerpayments.AlthoughtheDeputyacceptsClerkfeesandmoneysfromotherdepartments,theClerkisgenerallyresponsible for preparing and making these deposits.

TheformerClerk,whohadbeeninthatpositionfor36years,tookaleaveofabsencestartingDecember25,2013.InFebruary2014,shereturned to work a few days each month until she retired effective June 29, 2014. During this time, theDeputy carried outmost oftheday-to-daydutiesoftheClerk’soffice, includingpreparingandmaking bank deposits and recording receipts.1

FollowingtheformerClerk’sretirementinJune2014,Townofficialsbecameawareoftwounrecordedbankdepositstotaling$20,000.ThebookkeeperidentifiedthefirstdepositwhenreconcilingtheTown’s

1 AftertheClerkretired,theBoardappointedtheDeputytothepositionofClerk.


Objective

Scope andMethodology

Comments ofLocal Officials andCorrective Action

Junebankbalances.Townofficials followedupwith thebankandfoundthattheformerClerkmadea$13,000depositintotheTown’sgeneralfundbankaccountonJune30,2014,thedayaftersheretired.Overtwomonthslater,onSeptember8,2014,thebankalertedTownofficialstothefactthattheformerClerkhaddepositedanother$7,000into the Town’s bank account on that day. Deposit records show that bothofthesedepositsconsistedentirelyofcash.Townofficialsfoundthese deposits to be suspicious because the Deputy had primarily taken over the responsibility of preparing and making bank deposits in late December 2013 and the former Clerk had not generally performed this function since that time. The Deputy was not aware of these deposits and the former Clerk did not provide the deposit slips to thebookkeepertorecordintheTown’saccountingrecords,aswasthestandardprocedure.Uponlearningofthesedeposits,theBoardrequested that we initiate an audit.

TheobjectiveofourauditwastoexaminetheformerClerk’srecordsandfinancial practices. Our audit addressed the following relatedquestion:

• Did the former Clerk properly record cash receipts and make deposits in a timely and intact manner?

We examined the former Clerk’s records from January 1, 2012throughDecember31,2013.WeextendedourscopefortransfersitefeesbacktoJanuary1,2009.

We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). More information onsuch standards and the methodology used in performing this audit are includedinAppendixBofthisreport.Unlessotherwiseindicatedinthisreport,samplesfortestingwereselectedbasedonprofessionaljudgment,asitwasnottheintenttoprojecttheresultsontotheentirepopulation.Where applicable, information is presented concerningthe value and/or size of the relevant population and the sample selectedforexamination.

The results of our audit and recommendations have been discussed withTownofficials,andtheircomments,whichappearinAppendixA, have been considered in preparing this report. Town officialsagreed with our recommendations and indicated they planned to initiate corrective action.

The Board has the responsibility to initiate corrective action. Awrittencorrectiveactionplan(CAP)thataddressesthefindingsandrecommendations in this report should be prepared and forwarded to ourofficewithin90days,pursuanttoSection35ofGeneralMunicipal


Law.FormoreinformationonpreparingandfilingyourCAP,pleaserefertoourbrochure,Responding to an OSC Audit Report,whichyoureceived with the draft audit report. We encourage the Board to make thisplanavailableforpublicreviewintheClerk’soffice.


Misappropriation of Cash Receipts

ItistheClerk’sdutytosafeguardallmoneysreceivedandtoperformthefunctionsoftheClerk’sofficeinaforthrightandhonestmanner.To fulfill this duty, the Clerk must record cash receipts andmustdepositallmoneysreceivedintactandinatimelymanner.Allcashreceipts should be deposited in the same amount and form as received and should be recorded and deposited in a manner consistent with NewYorkStateTownLaw (TownLaw). It is theBoard’s duty tooversee theTown’s financial affairs, including those of the Clerk,otherofficialsandemployees.Boardoversightisessentialtoensurethat appropriate records are maintained and cash receipts are properly accounted for.

TheformerClerkretiredonJune29,2014butmadetwocashdepositstotaling$20,0002 into the Town’s general fund bank account after her retirement.Townofficialsfoundthesedeposits tobesuspicious, inpart,becausetheformerClerkhadonlybeenworkingat theTowna few days eachmonth since February 2014 and the Deputy hadgenerally been preparing and making the bank deposits during the sixmonths leadingup to theformerClerk’s retirement.TheBoardrequested that we conduct an audit of the former Clerk’s records. We examinedtheformerClerk’srecordsthroughDecember2013,whenshe was working full-time for the Town and handling most of the recordkeepinganddepositingdutiesforheroffice.

We found that the former Clerk did not properly record all cash receipts and did not deposit all moneys received intact and in a timely manner.The formerClerk received at least $36,742 from January1, 2009 throughDecember31, 2013 thatwasnot deposited into aTown bank account and could not be accounted for. We also found the Board did not provide adequate oversight, including adoptingwritten policies or procedures for the handling of cash receipts and performinganauditof thefinancial recordsof theClerkandotherdepartments. Figure 1 shows the cash shortage by revenue source. We havereferredourreporttotheJeffersonCountyDistrictAttorney’sOfficeforfurtherreview.

2 TheClerkdeposited$13,000cashonJune30,2014and$7,000cashonSeptember8,2014.


Figure 1: Identified Shortage as of December 31, 2013a

Revenue Source Amount

Transfer Site Fees $26,285

Arena Fees $9,841

Clerk Fees $1,245

Real Property Taxes $892

Subtotal $38,263

Less: Undeposited Cashb $1,418

Less: Unidentified Overagesc $103

Total Shortage $36,742

a We tested transfer site receipts from 2009 through 2013 and tested other receipts from 2012 through 2013.

b Cash that the Deputy found in the Clerk’s safe after the former Clerk took a leave of absence starting December 25, 2013

c The former Clerk deposited certain revenues in excess of what we could determine she was accountable for. In 2012, we found $63 of unidentified moneys in the former Clerk’s real property tax account and $40 of unidentified moneys in the general fund bank account labeled as youth program revenue that could not be traced to a youth program receipt.

Transfer Site Fees – The former Clerk received moneys from various Town officials and deposited the moneys into the Town’s bankaccount on behalf of the Supervisor.3Oneofficialwasthetransfersiteattendant. Town residents purchased tickets in various denominations based upon the amount of garbage they wanted to leave at the Town’s transfer site. These ticket fees were collected on a daily basis by the transfer site attendant,who recorded the daily collections in a logmaintained at the transfer site. The transfer site attendant also prepared daily activity reports summarizing the press numbered tickets sold and remitted the activity reports along with the moneys collected to the formerClerk’sofficefordeposit.TheformerClerkmaintainedher own transfer site cash receipts log which listed the amount of transfer site fees received from the transfer site attendant on a daily basis. The former Clerk maintained this log from at least May 2002 throughOctober2009;however,theonlyrecordsavailableafterthattimeperiodwerefromJanuarythroughOctober2013.Bycomparingthe former Clerk’s 2013 log of transfer site moneys received to the transfer site attendant’s log of fees collected, we established thatthe transfer site attendant’s log was representative of the amount of transfer site moneys remitted. We compared the total amount of transfersitefeescollectedfromJanuary1,2009throughDecember31, 2013 as per the transfer site attendant’s log to the amount of

3 Forpurposesofthisaudit,wemakenocommentontheproprietyoftheClerk,ratherthantheSupervisor,makingthesedeposits.


revenues in the general ledger4 and corresponding deposits made by theformerClerkandfoundthatrevenuesanddepositswere$26,285short theamountof fees remitted to theClerk’soffice from2009through 2013.5

ArenaFees – The former Clerk also received moneys from the arena director. The Town had a municipal arena where fees were collected for ice time rental, skating andbumper cars.Feeswere collectedon a daily basis and given to theClerk’s office on the followingday. The arena director retained copies of press numbered duplicate receipts which were issued to him when he remitted arena fees to the Clerk’soffice.WecomparedthetotalamountofarenafeescollectedandgiventotheClerk’sofficein2012and2013,asevidencedbythereceiptsissued,totheamountofrevenuesinthegeneralledger6 and corresponding deposits made by the former Clerk and found that revenuesanddepositswere$9,841lessthantheamountoffeesthearenadirectorremittedtotheClerk’soffice.Thisshortageprimarilyoccurred in 2013.7

Clerk Fees–TheClerkcollectspaymentsfordoglicenses,marriagelicenses,conservationlicensesandTownvitalstatistics.8Generally,allfeesreceivedbytheClerkarethepropertyoftheState,CountyorTown. Clerk fees are collected on a daily basis and are required to be paid to these agencies each month. We performed an accountability analysis, comparingknownassets toknown liabilities, and foundthatonDecember31,2013theClerk’scashassetswere$1,245lessthan known liabilities.

4 To ensure that the transfer site revenues recorded in the general ledger were accurate,wetracedfrombankdepositslips(onwhichtheformerClerkrecordedtherevenuesource)tothegeneralledgerandviceversa.Weadjustedtherevenuebalance for any errors or omissions identified, prior to comparing itwith theavailable departmental receipt records.

5 $595of this shortagewasassociatedwith the substitutionofchecks forcash.Refer to the section entitled Substitution for additional information.

6 Toensurethatthearenarevenuesrecordedinthegeneralledgerwereaccurate,we traced from bank deposit slips (on which the former Clerk recorded therevenuesource)tothegeneral ledgerandviceversa.Weadjustedtherevenuebalance for any errors or omissions identified, prior to comparing itwith theavailable departmental receipt records.

7 Only$8ofthisshortageisattributableto2012.8 Vitalstatisticsfeesarechargedforcopiesofbirthanddeathcertificates.


Figure 2: Identified Shortage of Clerk Fees as of December 31, 2013

Known Liabilities Amount

Due to the Villagea $840

Due to the Town $669

Due to the County $196

Due to the State $143

Total Liabilities $1,848

Known Assets

Undeposited Cash on Handb $420

Bank Balance $183

Total Cash Assets $603

Total Shortage of Clerk Fees $1,245

a The former Clerk was also the registrar of vital statistics for the Village of Alexandria Bay. It was the former Clerk’s normal practice to turn the cash and checks collected over to the Village Treasurer for deposit into the Village bank account. These amounts were Village checks deposited into the former Clerk’s Town Clerk account in lieu of Town cash not deposited.

b Because a cash count was not performed on December 31, 2013, we calculated this amount by totaling all Clerk fees received from the date of the former Clerk’s last deposit on December 9, 2013 through December 31, 2013.

RealPropertyTaxes–TheClerkalsoservesastheTown’sTaxCollectorandcollectsbothTownandCountyrealpropertytaxpaymentsinthatcapacity.TheClerkisaccountableforalltaxmoneyscollected.Attheendofthecollectionperiod,theClerkisrequiredtosettlewiththeCountyTreasurerandmustaccountforthetaxescollected,amountsremittedtotheSupervisorandCountyTreasurer,anyadjustmentstothe tax roll and the taxes that remainunpaid.TheClerkmust alsoturn over all surcharges and penalties collected for delinquent real propertytaxestotheSupervisorandCountyTreasurer.9 We analyzed the 2012 and 2013 tax collection seasons and determined that theformerClerk’sknowncashassetswere$892shortoftaxliabilitiesfor 2013.10 This shortage occurred because the former Clerk failed to remit the correct amount of interest and penalties to the Supervisor and CountyTreasurer. Nomoneys remained in the tax collector’s

9 Residents can pay their taxes in full or over time by installment payments.PenaltiescollectedonlatepaymentsinfullmustbeturnedovertotheSupervisor.Penalties collected on late installment payments must be turned over to theCounty Treasurer.

10Our analysis of the 2012 tax collection season found that the formerClerk’sassets exceeded liabilities by $63.We subtracted this amount from the totalshortageidentified:seeFigure1.


bank account as ofDecember 31, 2013 to payoff the outstandingliabilities.11

Substitution –The shortageof transfer site feesandClerk fees, asdiscussed previously, was partly the result of a check substitutionscheme perpetrated by the former Clerk. Substitution involves not recording receipts that are paid by check and then substituting the unrecorded checks for receipts paid in cash. Substitution allows receipt records to agreewith bankdeposits in total, becausewhenreceipts paid in cash are taken from the original deposits they are replaced by unrecorded checks. We reviewed the supporting detail of the deposit compositions associated with transfer site fees and Clerkfeesandfound$1,455 inchecksfromother revenuesourcesdepositedinplaceoffeesthatwerenotdeposited–specifically,$404inClerk fees and $191 inVillage vital statistics fees deposited inplaceoftransfersitefees,a$20donationtotheyouthprogramand$840inVillagevitalstatisticsfeesdepositedinplaceofClerkfees.12

Furthermore,althoughitwastheformerClerk’snormalpracticetoremitthecashandcheckscollectedforVillagevitalstatisticsdirectlytotheVillageTreasurertodeposit,theformerClerk’slastpaymentto theVillage, prior to her retirement,was a $1,172 checkwrittenfrom the former Clerk’s personal bank account. We attempted to determinetheamountofVillagevitalstatisticsfeestheformerClerkwasaccountableforduringourauditperiod.However,duetothepoorcondition13of theClerk’sreceipt recordsforVillagevitalstatistics,wecouldnotdeterminetheamountofVillageregistrarfeestheClerkactuallycollectedorwhetherthe$1,172personalcheckshewrotetotheVillagerepresentsallthefeescollectedbytheClerkandduetotheVillage.

ItisessentialfortheClerktoproperlyaccountforalltransactions.Toensurethatspecificcashreceiptscanbetracedfromtheaccountingrecordstothebankstatements,allcashreceiptsmustbeenteredintoasuitable book or record and must be deposited intact. While Town Law requiresmoneyscollectedtobedepositedwithincertaintimeframes,goodbusinesspracticerequiresthatmoneysbedepositeddaily,orassoonaspossibleaftercollection,toreducetheriskoflossormisuse. The former Clerk did not maintain adequate cash receipt records to accountforallthemoneysreceivedbytheClerk’soffice.Whilereceiptrecordsforrealpropertytaxesandwaterandsewerpaymentswere

11TheformerClerkoverpaidtheSupervisor$80butunderpaidtheCountyTreasurer$972,resultinginanetshortageof$892.

12Theseamountswereincludedinthe$26,285shortageoftransfersitefeesand$1,245shortageofClerkfeesidentifiedpreviously.

13TheClerkdidnotkeepalogorcashreceiptsbooklistingalloftheVillagevitalstatistics revenues received on a daily basis.

Cash Receipts


sufficient,therecordsforotherrevenuesourcesdidnotprovideaclearaudittrailthatwouldallowspecificcashreceiptstobetracedthroughtheClerk’srecordstospecificdepositsonthebankstatements.Forexample,theformerClerkdidnotissueduplicatereceiptsorrecordmoneys received from the Supervisor in a cash receipts journal; instead, these fundswere just deposited in the bank.Although theformer Clerk or Deputy issued duplicate receipts to the arena director and youth program director for moneys they remitted to the Clerk’s office,theformerClerkgenerallydidnotrecordthereceiptsinacashreceipts journal14 or maintain any records to show when she deposited specific receipts. The former Clerk used a computerized programtoaccount forClerk fees received,but, similar toarenaandyouthprogramreceipts,shedidnotidentifydepositsinherrecordstoshowwhen the receipts were deposited into the bank.Also, the formerClerk maintained a manual log showing daily transfer site receipts from the transfer siteattendant;however, this recorddidnot showwhichdailyreceiptswereincludedinthetransfersitedeposits,anditwas only available for 10 months in 2012 and 2013.15

The former Clerk also did notmake timely deposits. Clerk fees,transfersitefeesandarenafeesweredepositedasmuchas229days,87daysand61days,respectively,afterthedatethesefeeswerepaid.16

Realproperty taxpaymentswerealsodeposited late.Forexample,$3,467ofcash,associatedwiththe2012taxcollectionseason,wasdepositedinJanuary2013,sevenmonthsafterthelasttaxpaymentwas collected. There were also months during our audit period when certaincashreceiptswerenotdepositedatall.Forexample,theformerClerkdidnotdepositany transfersite feesduringMay,NovemberandDecember2012.Inaddition,whentheformerClerktookaleaveofabsencestartingDecember25,2013,theDeputyfound$1,418ofcash in theClerk’s safewhich could not be traced to any specificreceipts or revenue source.17

When moneys are not promptly recorded in cash receipt journals and depositedtimelyandintact,thereisincreasedriskthatmoneyscouldbe lost or misappropriated.

14An arena cash receipts journal coveringSeptember andOctober of 2012wasavailableforreview,buttherewasnothingonfilefortherestofourauditperiod.Inaddition,noyouthprogramcashreceiptsjournalswereavailableforreview.

15 The former Clerk’s transfer site cash receipts logs covering January throughOctober2013wereavailableforreview,butnologswereavailablefor2012orNovemberandDecember2013.

16 We obtained deposit compositions from the bank that showed the checks deposited intoTownaccounts.Theselatedepositswereidentifiedbycomparingthecheckissue dates with the deposit dates.

17 Because this $1,418 could not be traced to a particular revenue source wesubtractedthisamountfromthetotalshortageidentified:seeFigure1.


It is important for the Board to establish written policies andprocedures for cash receipts that address the duties, procedures,recordsandoversightrequiredtosafeguardTownfunds.Inaddition,Town Law requires the Board to conduct or obtain an annual audit of therecordsandreportsofanyTownofficeroremployeewhoreceivedor disbursed moneys on behalf of the Town in the preceding year. TheBoardshouldmonitortheTown’sfinancialaffairsbyreviewingthe Supervisor’s monthly reports to the Board and should follow up on any inconsistencies or large variances between budgeted amounts and actual amounts.

The Board has not adopted written policies or procedures establishing the responsibilitiesanddutiesofTownemployeesandofficials forcollecting, recording and depositing cash receipts. In addition, theBoard does not conduct or obtain an annual audit of the records andreportsofTownofficersandemployeeswhocollectordisburseTown moneys, including the Clerk, transfer site attendant, arenadirectororSupervisor.AlthoughtheBoardengagedtheservicesofanIndependentAuditortoreviewthecontrolssurroundingthecashreceiptsandcashdisbursementsfunctionsattheTownfor2010,thisengagement was a consultation18anddidnotfulfilltheBoard’sannualaudit requirement. Testing was limited to certain cash disbursement transactions, and, according to the management letter and reportissued to the Board, the auditor did not review or test any cashreceipts. Had the Board members conducted a review of the former Clerk’srecordsandreports,theymayhaverealizedthattheformerClerk did not maintain adequate cash receipts records and that she did notmakedeposits in an intact or timelymanner.Additionally,hadtheBoardmembersreviewedthefinancialrecordsofthetransfersiteattendant,arenadirectorandSupervisor,asapartoftheirannualaudit,theymayhavediscovereddiscrepanciesbetweencashreceiptsreceived and recorded.

AlthoughtheBoarddidreceiveareport,preparedbythebookkeepereachmonthonbehalfoftheSupervisor,whichlistedthecashreceiptsreceived for the month and year-to-date revenues and budget-to-actual variances, theBoarddidnotnoticethatcashreceiptsweremissingduring certain months within our audit period.

• NotransfersitefeerevenueswerereportedasreceivedduringMay,NovemberandDecember2012,eventhoughthetransfersitewasopenfivedaysperweekandfeesweregiventotheformer Clerk on an almost daily basis.

Board Oversight

18Themanagement letterand the report stated that thefirm“performedspecificconsultingprocedures”relatedtotheTown’s2010fiscalyear.


• No Clerk fees were remitted or reported during February,AprilandDecember2012andFebruary2013,even thougha portion of the Clerk fees collected each month must be remitted to the Town the following month.

• Nointerestandpenaltieson2012and2013realpropertytaxeswerereporteduntilDecemberofeachyear,19 even though the former Clerk should have remitted penalties levied on the late paymentofpropertytaxestotheSupervisorinJulyeachyear,afterthecollectionperiodendedinJuneeachyear.

Had the Board members adopted policies and procedures for cash receipts, performed an annual audit of all Town departments andconducted thorough reviews of the Supervisor’s monthly reports,they may have become aware of the former Clerk’s misappropriation sooner.

TheBoardshould:

1. Take appropriate action to recover any moneys due the Town.

2. Ensure that the Clerk maintains cash receipts journals showing allmoneysreceived,includingthedates,payees,amountsandformsofpayment received(e.g..,cash,check,etc.)and theamounts and dates of the related deposits.

3. Ensure that the Clerk deposits all cash receipts intact and in a timely manner.

4. Adopt written policies and procedures establishing theresponsibilities anddutiesofTownemployees andofficialsforcollecting,recordinganddepositingofcashreceipts.

5. Annually audit, or obtain an annual audit of, the financialrecordsandreportsofallTownofficersandemployeeswhoreceive or disburse moneys on behalf of the Town.

6. Monitor the Town’s financial activity by reviewing theSupervisor’s monthly reports to the Board and follow up on anysignificantvariancesordiscrepanciesbetweenbudgetedand actual amounts.

Recommendations

19Thepenaltiesassociatedwiththe2012taxcollectionseasonwerenotactuallydeposited into theSupervisor’s accountuntil January9,2013;however, thesepenalties were included on the December 2012 report to the Board.


APPENDIX A

RESPONSE FROM LOCAL OFFICIALS

Thelocalofficials’responsetothisauditcanbefoundonthefollowingpages.



Dale Hunneyman


APPENDIX B

AUDIT METHODOLOGY AND STANDARDS

TheobjectiveofourauditwastoexaminetherecordsandfinancialpracticesoftheClerkandassesswhethermoneyswereproperlyaccountedforfromJanuary1,2012throughDecember31,2013.WeextendedourscopefortransfersitefeesbacktoJanuary1,2009.

Toachieveourauditobjectiveandobtainvalidauditevidence,weperformedthefollowingprocedures:

• WeinterviewedTownofficialsandemployeestogainanunderstandingoftheClerk’spracticesforcollecting,recording,depositing,remittingandreportingmoneyscollectedandreceived.

• We reviewed all available cash receipt records maintained by the Clerk to determine if they wereadequateandcontainedalevelofdetailnecessarytodeterminethedates,amountsandformsofpaymentreceived(e.g.,cash,check,etc.)andwhenmoneysweredeposited.

• WeobtainedinformationonpaymentsmadefromtheStateandCountytotheTownandverifiedthatpaymentstotaling$2,190,868weredepositedintotheTown’sbankaccount.

• WereviewedthedepositcompositionsofallthedepositsintoalloftheTown’sbankaccounts,includingtheClerk’saccounts,for2012and2013toidentifyandfollowuponchecksthatcould have been substituted in place of cash not deposited.

• We randomly selected 20 customer accounts for water and sewer and traced all payments posted totheseaccountsduringMayandAugustof2013tobankstatementsanddepositcompositionsto determine if these payments were deposited intact.

• We reviewed an adjustment report for 2013 which showed all of the adjustments made to individual water and sewer accounts during the year to determine if the adjustments were appropriate.

• Weselectedasampleof41checksdepositedintotheTown’sbankaccountthatweconsideredto be at a higher risk of being substituted in place of other revenues not deposited. We traced thesecheckdepositstotaling$23,721tothegeneralledgertodetermineiftheywereallocatedto the appropriate revenue accounts.

• WeinterviewedVillageofficialstodeterminehowtheClerkpaidtheVillagethevitalstatisticsfeesshecollected.WealsoreviewedtheClerk’sVillagecashreceiptrecordstodetermineifwe could establish how much vital statistics revenue the Clerk was accountable for.

• We interviewed the Supervisor, transfer site attendant, arena director and youth programdirector to gain an understanding of their collection process and the records they maintain.


• We interviewed the Supervisor and Board members to gain an understanding of how the Board provides oversight of theClerk and otherTown officials and employeeswho handle cashreceipts.

• Weperformedanaccountabilityanalysisofrealpropertytaxcollectionsin2012and2013todetermineiftheClerkcouldaccountforthetotalamountoftaxliabilitiesduetotheTownandCounty.

• Wetraced2012and2013transfersite,arenaandyouthprogramdepositstothegeneralledgertoensurethatalldepositswereproperlyrecorded.Wealsotracedalltransfersite,arenaandyouth program entries in the general ledger back to deposits to ensure that the general ledger didnotcontainanyamountsnotdeposited.Weadjustedthegeneralledgerasneeded,basedonouraudittesting,andthencomparedtheadjustedgeneralledgerbalancetothetransfersite,arenaandyouthprogramcashreceiptsgiventotheClerk,todetermineifallcashreceiptsweredeposited in the Town’s bank account.

• We performed a bank reconciliation and prepared an accountability analysis for Clerk fees as ofDecember31,2013.

• We compared the dates of the checks in the compositions of deposits to the dates of deposit to determine the number of days between payment and deposit.

WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperformtheaudittoobtainsufficient,appropriateevidencetoprovideareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.Webelieve that theevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.


APPENDIX C

HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT

OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/

Toobtaincopiesofthisreport,writeorvisitourwebpage:


APPENDIX DOFFICE OF THE STATE COMPTROLLER

DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller

GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller

LOCAL REGIONAL OFFICE LISTING

BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244HawleyStreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]

Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties

BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]

Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties

GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOneBroadStreetPlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]

Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties

HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]

Serving:NassauandSuffolkCounties

NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]

Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties

ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThePowersBuilding16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]

Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties

SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333 E. Washington StreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]

Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties

STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244HawleyStreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313

Documents

Audit Town 2016 - Office of the New York State Comptroller