NYS Comptrollers Audit of the Board Oversight and Internal Controls Over the Clerk-Treasurer’s Records and Reports Reveals the Village Of Alexandria Bay tax levy of $944,000 for the 2011-12 fiscal year was excessive and unnecessary.
The buzz words in this Audit Report from the State Comptrollers Office is Segregation of Duties of the Village Clerk Treasurer and Deputy Clerk Treasurer. The former mayor combined the duties when he took office 4 years ago. This change defeated the purpose of segregation of duties which is an integral part of internal control.
The auditors describe Proper Internal Controls as ensuring that duties are adequately segregated so that an individual does not control all phases of a transaction. When one person performs all the duties related to cash collections or disbursements, record keeping, and reconciliation of accounts, there is an increased risk that cash could be misappropriated without detection.
The auditors made these comments:
Because the Board failed to properly monitor Village finances and oversee the work of the Clerk-
Treasurer, the Village has not kept proper accounting records for at least five years. This basic deficiency resulted in an ineffective budgeting process, a lack of critical financial information for the Board, and an excess of accumulated cash on deposit which led to the levy of unnecessary taxes. Additionally, the Village has not complied with statutory reporting requirements.
Cash Surplus and Tax Levy – As of May 31, 2011, the Village had 19 separate bank accounts, 15 of which held moneys set aside for reserves or other purposes.4 To assess the financial condition of the
Village’s main operating funds in the absence of adequate accounting records, we examined the Village’s bank statements to determine how much money the Village had on deposit in other checking and savings accounts,5 which were not designated for reserves or other specified purposes. The amount of cash on deposit in these four accounts was enough to fund almost the entire following year’s budget, as follows:
- Total Unreserved Cash on Deposit $2,336,740
- FY 2012 Total Budgeted Appropriations in the General, Water, and Sewer Funds $2,524,801
- Cash as Percent of Following Year's Budget 92.5%
Because the Board did not properly oversee the Village’s record keeping, Village officials were apparently unaware of this significant undesignated cash surplus on deposit. As a result, the Village’s tax levy of $944,000 for the 2011-12 fiscal year was excessive and unnecessary.
Audit summary can be found by clicking HERE
Complete Audit [PDF] can be found HERE
It has become clear to me that the previous board[s] was dysfunctional in the sharing of financial information. Trustee's were only given spoonfuls of this vital information, the bulk of it being withheld for reasons that appear to be childish. It also becomes very clear that the abrupt termination of then Deputy Clerk Treasurer K. Butcher was unwarranted and will most likely cost the village tax payers with a law suit. More importantly, the current board and newly elected Mayor D. Jury are taking corrective measures as suggested by the comptrollers office.