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June 6, 2013

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Allegany County Industrial Development Agency, City of Middletown, Village of Mount Morris, Village of Rockville Centre and the Yaphank Fire District.

“My office's audits of local governments improve their financial management practices," DiNapoli said. "These audits are tools for local officials to make sure proper policies and procedures are in place to protect taxpayer dollars and provide the best possible service these taxpayer dollars can deliver."

Allegany County Industrial Development Agency – Internal Controls Over Selected Financial Activities (2012M-244)
Auditors found a number of individuals received compensation from both the Allegany County Industrial Development Agency (ACIDA) and Allegany County. It is unclear whether these individuals were compensated by the ACIDA outside of their county job duties and hours. In addition, the ACIDA board failed to use appropriate evaluation criteria before it approved the construction of a $760,000 facility with the apparent sole function of housing the Allegany County Departments of Aging and Veterans Affairs. There is no authority in state law for an IDA to construct a building to be used for county office space.

City of Middletown – Selected Financial Operations and Information Technology (Orange County)
The city council has adopted a procurement policy to govern the city’s purchasing practices. The policy, however, does not mandate the use of competitive methods to obtain professional services. As a result, city officials and employees did not solicit competitive proposals for five of eight professional services providers who were paid $164,613. Auditors also found the city council did not establish an IT breach notification policy or a disaster recovery plan.

Village of Mount Morris – Treasurer’s Office (Livingston County)
The village board hired an accounting firm to perform many of the village treasurer’s duties, such as maintaining the accounting records, preparing and processing payroll and disbursement checks, preparing bank reconciliations, and preparing the treasurer’s monthly and annual financial reports. The board delegated what could be considered ministerial tasks and prevented the treasurer from performing the discretionary functions incumbent to the office of treasurer. Further, the board has not audited the treasurer’s records and reports for 2011 and 2012.

Village of Rockville Centre – Cash Receipts from Recreational Activities and Information Technology (Nassau County)
The village board has not adopted written policies for cash receipts or segregated critical financial transaction duties in the parks and recreation department. The department did not ensure that appropriate cash receipt documentation was maintained, reconciliations were prepared and deposits were made intact and in a timely manner. In addition, the village needs to improve internal controls over information technology. Auditors found that copies of back-up data are not stored in a secure off-site location and the board has not developed a disaster recovery plan.

Yaphank Fire District – Claims Processing (Suffolk County)
The fire district passed a resolution allowing the treasurer to pay specific bills prior to audit. However, instead of including only those specific exceptions allowed by town law, the district’s resolution also allows credit card bills to be paid in advance of the board’s audit. Without properly auditing and approving all claims before payment, the board does not have adequate assurance that the purchases were adequately approved or that the goods and services were actually received.

For access to state and local government spending and more than 60,000 state contracts, visit http://www.openbooknewyork.com/. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

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