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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Plainview Water District – Board Oversight and Other Financial Related Activities (2012M-35)


Released: December 14, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to determine whether the Board had established adequate internal controls over financial operations and information technology (IT) for the period January 1, 2010, to April 30, 2011.

Background

The Plainview Water District, located in the Town of Oyster Bay in Nassau County, provides water to about 36,000 residents. A three-member elected Board of Commissioners is responsible for overall governance of the District. The 2011 operating budget was $6,326,126 and actual expenditures were $6,912,682.

Key Findings

  • The Board did not require or review budget status reports, resulting in the over-expenditure of the general fund by $769,330 in 2010. District officials made more than $1 million in budget transfers for the 2010 fiscal year which were prepared and reported after the year had ended.
  • The District has over $2.7 million of available capital reserve funds, yet the District continued to issue debt to finance capital projects.
  • Of the $40,210 in credit card payments we reviewed, 34 charges totaling $5,486 were not adequately supported, and the District prepaid $1,995 in tuition for an employee who did not meet policy requirements.
  • The District's code of ethics did not address or establish procedures in relation to hiring, supervising, and evaluating the performance of family members.
  • District officials did not ensure that user access to computerized financial data is appropriately restricted; that access changes are properly authorized and documented; or that management periodically reviews detailed logs of system activity.

Key Recommendations

  • Review budget-to-actual reports periodically and properly authorize budget amendments before appropriations are over-expended.
  • Adopt a formal policy on the establishment, funding, and use of capital reserves and ensure that the amounts are realistic and used as intended.
  • Ensure that all claims have sufficient documentation to permit a proper audit claims.
  • Revise the District's code of ethics to address and establish procedures in relation to hiring, supervising, and evaluating the performance of District officials' family members.
  • Restrict user access to the financial software to only those functions that employees need to perform their job functions.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236