Recent municipal audits conducted by New York State Comptroller Thomas P. DiNapoli’s office found several accounting issues at a number of municipalities across the state, including two in Herkimer County and one in Tompkins County. Webb The northern Herkimer County Town of Webb, home to the popular tourist destination hamlet of Old Forge, was the […]
Recent municipal audits conducted by New York State Comptroller Thomas P. DiNapoli’s office found several accounting issues at a number of municipalities across the state, including two in Herkimer County and one in Tompkins County.
Webb
The northern Herkimer County Town of Webb, home to the popular tourist destination hamlet of Old Forge, was the subject of an audit follow-up to determine if the town addressed issues identified in a November 2018 report.
DiNapoli’s original audit found several opportunities for improvement surrounding the town-operated McCauley Mountain Ski Area related to the collection of season passes and lift-ticket revenues. In the follow-up visit, auditors found the town made limited progress implementing corrective action, only acting on two of the five audit recommendations.
At issue is the way employees and officials recorded and reconciled ticket and pass transactions, according to the audit. McCauley sells various types of daily lift tickets, seasonal ski passes, and five-day passes that people can purchase on site, online, or through a third-party vendor. Officials can also issue complimentary ski-lift cards called comp cards to individuals to redeem for a free lift ticket.
DiNapoli’s office recommended the town adopt policies and procedures to monitor all season pass and lift-ticket collections to ensure the point-of-sale system properly records the transactions. Additionally, employees should reconcile daily sales to cash receipts.
During the audit period of Jan. 1, 2017 through March 31, 2018, auditors found that out of 14,700 lift ticket and season-pass transactions, ski-area officials did not reconcile 2,400 transactions that did not require payment.
The comptroller’s follow-up visit found that town officials did not adopt policies and procedures as recommended, taking partial action on two recommendations, no action on two recommendations, and that one recommendation is no longer applicable.
The Town of Webb indicated it will take corrective action to implement recommendations to develop policies and procedures over ski collections to provide guidance on how collections are recorded, deposited, and reconciled and to also obtain supporting documentation for each type of transaction to reconcile them and ensure legitimacy.
Frankfort
In its audit of the Town of Frankfort Justice Court, DiNapoli’s office found the town justices did not provide adequate oversight of court financial activities. This included not preparing monthly bank reconciliations to ensure accurate accounting for collections and identifying discrepancies. One result of the lack of oversight was a shortage of $3,593 by a former justice that originated five years earlier but was not identified until after he left office in 2020.
The audit covered Jan. 1, 2019 through June 21, 2021, with additional research back to Dec. 31, 2015. Court revenue during the audit period was $848,162.
While receipts were generally deposited intact, the audit found they were not always deposited in a timely manner. Justices did not make a total of 15 out of 19 monthly reports to the town supervisor in a timely manner.
The final key finding was that the court software lacked fundamental controls, leaving transactions open to modification or deletion. According to the audit, the software did not track voided court transactions, allowed users to change receipt numbers, allowed users to delete or change previously recorded entries, and was unable to generate an audit log. Additionally, while each user received a username and password, all users could view all user passwords once logged in, making it possible for users to easily log in under another user’s account.
DiNapoli’s office informed the Town of Frankfort that it could receive updated software free of charge from the New York State Unified Court System. It also recommended that town court perform monthly bank reconciliations, make deposits within 72 hours of collection, and file monthly reports in a timely manner. The town indicated it will take steps to implement the recommendations.
Danby
In Tompkins County, an audit from Jan. 1, 2020 through June 30, 2021 found that tax collections were missing and not deposited in an efficient manner in the Town of Danby.
The audit also found that the clerk did not identify tax-collection accounting errors totaling $63,959 and could not account for about $1,000 in cash from tax collections. The town board failed to perform an annual audit of the clerk’s records.
The comptroller’s key recommendations include making intact and timely deposits, securing collections prior to deposit, maintaining all records including duplicate cash receipts, preparing monthly bank reconciliations and accountabilities, performing an annual audit of the clerk’s records, and obtaining formal training for the clerk.
Noting that the clerk position experienced turnover during the audit period, the town indicated it has taken several steps to correct deficiencies, and it will continue to make improvements.
DiNapoli’s office also conducted audits in the Village of Delhi, Town of Stanford, and City of Yonkers.