The New York State Comptroller, Thomas P. DiNapoli, has released a series of audits highlighting issues in financial oversight and management among several local governments and school districts.
In one case, the board did not ensure that financial activities were properly recorded or reported, which increased the risk that errors or irregularities could occur without detection or correction. The audit found that the board failed to make sure its bylaws were adequate or enforced their limited financial provisions. Additionally, it did not establish supplemental financial policies or procedures, nor did it conduct thorough audits of bills or annual audits of the treasurer’s books and records. The treasurer did not exclusively handle and deposit all funds as required, instead allowing another member to manage hall rental revenue.
Another audit revealed insufficient oversight by a district board over its financial operations. As a result, a former fire department chief—who also served as a director of the Border City Hose Company—entered into an unauthorized contract with a private corporation and maintained an unauthorized bank account where he deposited and withdrew district money improperly. The board also failed to ensure that goods and services were procured in accordance with state law and district policy, or that procurement was conducted in taxpayers’ best interests. Oversight of the chief was lacking, and there was no guarantee that the treasurer received, accounted for, and disbursed all district funds.
Further findings showed company officers did not perform even minimal oversight responsibilities outlined in company bylaws. Some officers hindered the treasurer’s ability to fulfill fiscal duties by appointing themselves as recipients and custodians of most company money. This led to improper accounting for company funds; additionally, one director who also served as fire department chief used company money for personal benefit.
Auditors found another board did not adequately monitor financial activities or ensure proper record-keeping by its treasurer. The treasurer failed to prepare accurate and timely reconciliations for checking accounts or reconcile savings and money market accounts. There were no detailed monthly reports on receipts and disbursements provided to the board nor balance sheet reports; annual financial reports for 2019 through 2024 were also not filed with the Comptroller’s Office.
Lastly, auditors determined that claims auditing procedures were lacking: “The claims auditor did not properly audit all claims prior to payment.” Of 2,943 claims totaling $23.7 million reviewed by auditors (with 202 claims totaling $1.4 million sampled), they found that “105 claims totaling approximately $804,000 should not have been approved by the claims auditor for payment.” Auditors confirmed each claim reviewed was for proper district purposes but noted: “the board had no assurance that claims approved by the claims auditor complied with its written policies and that each purchase was for a proper district purpose.”
