HERKIMER, N.Y. — An audit by of the office of New York State Comptroller Thomas DiNapoli showed that the Herkimer village clerk-treasurer failed to maintain accurate and up-to-date financial records and reports, according to a press release from the comptroller.
The audit — which covered the period of June 1, 2022, through Oct. 1, 2024 — shows that the current and former clerk-treasurers failed to properly record financial activity totaling $10.5 million related to the processing of bank transfers, payroll, real property taxes, and cash receipts and disbursements; and perform bank reconciliations in an accurate or timely manner allowing discrepancies between general ledger cash balances and adjusted bank balances to remain unidentified and unresolved, per the announcement.
As of Feb. 29, 2024, cash balances did not agree with bank balances for 27 of the 37 bank reconciliations the comptroller’s auditors prepared. Additionally, total cash in the financial records was $1.9 million higher than the village’s total adjusted bank balance.
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The audit also found the clerk-treasurer did not provide the village board with adequate monthly reports and failed to file annual financial reports (AFRs) for the village’s last two completed fiscal years.
“Furthermore, because the previous two clerk-treasurers did not file AFRs for the village’s 2020-21 and 2021-22 fiscal years, the current clerk-treasurer had to file these reports,” the audit report read. Failure to file AFRs in a timely manner prevents the board, taxpayers, and other interested parties the ability to assess the village’s financial standing.
“The poor records and reporting occurred, at least in part, because the board did not effectively oversee the clerk-treasurers,” the report stated. “For example, it did not audit, or provide for an audit of, the clerk-treasurers’ records and reports for fiscal years 2022-23 and 2023-24 as required by village law Section 4-408(e).”
The report noted that board members were generally aware of the annual audit requirement, but not all members understood how to conduct or obtain an audit.
DiNapoli’s office made several recommendations to the village to correct the issues including maintaining complete, accurate, and timely financial records that account for all financial activity; ensure errors and omissions in the financial records identified in the audit are corrected; ensure bank reconciliations are completed in a timely manner and differences are promptly investigated and resolved; provide adequate and complete monthly reports to the board including budget-to-actual comparisons; file delinquent AFRs and ensure future reports are filed within 90 days after the close of the fiscal year.
Additionally, DiNapoli’s office recommended the board ensure the clerk-treasurer submits timely AFRs and conduct or arrange for an audit of the clerk-treasurer’s records and reports on an annual basis.
In a March 4, 2025, letter to DiNapoli’s office, Mayor Dana Sherry indicated several of the issues were due to incomplete financial information for 2022 and 2023 and her staff has been working to update and complete the village’s financial records.
“Since inheriting these issues in 2022, I am happy to announce that three annual update documents have been filed by the clerk’s office, and we are currently working on the fourth and final report that will be filed by the end of March 2025,” she wrote. “At that point, this office will finally be brought up to date and current.”
