The Village of East Williston failed to provide receipts for 95 property tax payments and to repay advances made from the general fund to the water fund in the same calendar year among, according to an audit released by the state Comptroller Thomas DiNapoli’s office last week.
The problems were among several weakness in village financial controls cited by the comptroller’s office in a routine audit.
Included were inconsistencies in the village’s payments for good and services. The report said the village board did not properly audit and approve 23 of 24 claims that we reviewed totaling $20,010. These 23 claims either lacked supporting documentation, a signature certifying the approval of the claim, or the audit date, or were made using a confirming purchase order.
The report also said the village lacked a disaster recovery plan for situations including power outages, hardware failures, fire, flood or storm.
Brian Butry, a spokesman for the state comptroller’s office, characterized the findings of the report as “bookkeeping errors” and instances of “not following best practices.”
Village of East Williston Mayor David Tanner responded to the audit at the village’s board meeting Monday, saying the problems cited by the comptroller’s office were not significant.
“It’s all bookkeeping,” said Tanner said, adding that no significant fiscal discrepancies in the village’s accounting were uncovered.
Tanner said the auditors’ “first charge” was to gauge the village’s financial viability. He said they initially raised questions about the town’s plan to pay off bonds purchased for the construction of the new Village Hall and road improvements. They also posed questions about the town’s water fund.
Tanner said village officials explained the village’s plans to raise tax rates next year to pay off the bonds and also told them about the recent rise in water rates.
“We answered all their questions,” Tanner said.
Then, Tanner said, the auditors moved on to examine the village books in more detail, ultimately focusing on a 17-month period between June 1, 2009 and Nov. 30, 2010.
Tanner said prior to the meeting that the village had already amended its practices in response to the report or is in the process of doing so.
“Most of the policies were already implemented,” Tanner said. “The staff is going to do the best they can to comply with the comments.”
The comptroller’s report said the village board had not established policies or procedures for the collection of cash receipts. A test of 100 cash receipts from the cash receipts journal during the audit showed that the village’s deputy clerk did not issue receipts for 95 payments totaling $59,587 for real property taxes, water rents, and miscellaneous items.
The comptroller’s report said deputy clerk’s cash receipt book showed that only 45 pre-numbered receipts were issued during the 17-month audit period. So pre-numbered receipts were issued for only 1 percent of the 4,615 receipts collected, the report said. In addition, nine receipts were said to be missing from the cash receipts book.
Village treasurer Michael Delury said the village already had a receipt system in place.
“All of the items on the cash receipt will be written. The controls have to be consistently applied throughout,” Delury said. “If we had more people we could do a perfect job.”
The audit said also the village’s water fund did not repay interfund advances of $226,024 from the general fund, as required by General Municipal Law, by the close of the fiscal year in which they were made. Water fund budgets included expenditures of $25,000 in 2008-09 and $40,000 in 2009-10 to repay loans from the general fund.
There were no actual transfers from the water fund to the general fund until June 2010, the report said, when a budgeted transfer of $25,000 was made and then an additional $175,000 in March 2011, reducing the amount due to the general fund to $226,024.
In a written response on May 17 to the audit, Tanner assured the comptroller’s office that an action plan was being put in place to address the state comptroller’s findings.
Included was a procedure to ensure that all outgoing payments for goods and services are dated.
On the interfund advances, Tanner said the village had implemented multi-year repayment plan with all advances to be paid in full by fiscal 2012. He said the village is also considering a reserve amount for unforeseen expenditures, such as a water main break.
Tanner also said the village has had an off-site back-up system for its financial records since 2008 that includes daily off-site back-up.
