State Comptroller DiNapoli Releases Municipal & School Audits

New York State Comptroller Thomas P. DiNapoli today announced the following local government and school audits were issued.

The board did not conduct a thorough audit of claims paid. Auditors reviewed 62 claims totaling $280,832 and determined that none of the claims were audited and approved by the entire board as required. Auditors determined that the 62 claims were properly supported and for valid and legal purposes. However, the lack of a claims audit increased the risk that claims for improper purposes could be paid, or that irregularities could go undetected and uncorrected.

City officials did not properly manage the city’s fund balance or ensure that financial activity was accurately recorded and reported. Specifically, city officials did not consistently maintain unrestricted fund balance in accordance with the city’s fund balance policy, and the city’s accounting records and financial reports were inaccurate.

The board adopted budgets that relied on appropriated fund balance and underestimated expenditures, resulting in recurring operating deficits that significantly depleted the district’s financial cushion. As a result, the district's surplus fund balance declined to $607,034 at the end of the 2024-25 fiscal year, representing just 0.6% of the ensuing year’s budget. The district also issued $8 million in revenue anticipation notes to address year-end cash flow needs.

District officials did not properly manage and monitor building access accounts and devices. Specifically, of the accounts auditors reviewed, the district had active, but unneeded, accounts with assigned key fobs in the system. As a result, there was a potential risk for unauthorized access to district school buildings, compromising building security and safety for students, teachers, staff and visitors.

The board did not provide adequate oversight of the district’s financial operations. As a result, contracts were incomplete, required policies were not adopted, commissioners did not complete required fiscal oversight training and the board did not annually audit the treasurer’s records.

District officials did not properly manage and monitor building access accounts and devices. Specifically, the district had active, but unneeded, accounts with assigned key cards in the system. As a result, there was a potential risk for unauthorized access to district school buildings.

Department officials did not adopt a written investment policy or establish procedures to govern the investment of department funds or provide a framework to help ensure funds were invested safely and prudently, and that the department’s resources were not exposed to unnecessary financial risk. During the audit period, the department invested $77,200 with a local tax preparer/insurance agent who issued promissory notes that promised an 8% annual return. The individual whom the department invested their funds with subsequently filed for bankruptcy in April 2023 and was convicted of operating a Ponzi scheme involving more than $50 million. Although the department recovered $6,442 through the bankruptcy proceedings, it lost $45,758 of its principal investment and never received a return on the investment.

The board did not properly audit all claims before payment, and the district incurred unnecessary costs totaling approximately $9,700 as a result. Auditors reviewed 137 claims totaling approximately $367,000 and determined that 115 claims totaling approximately $357,000 (84% of the claims reviewed, and 97% of dollars examined) did not have sufficient documentation to support a proper audit and should not have been approved and paid for.

The board did not provide adequate oversight of the treasurer’s accounting records and financial reports or ensure that all required Annual Financial Reports (AFRs) were filed. As a result, the board lacked assurance that the district’s accounting records and financial reports were accurate, financial operations were properly monitored and statutory reporting requirements were met. In addition, when AFRs are not filed, the board, taxpayers, the Office of the State Comptroller and other interested parties are prevented from obtaining timely and reliable information to assess the district’s financial condition.

The board authorized salaries and benefits through resolutions and a collective bargaining agreement (CBA). Time worked was supported by time records containing supervisory approval, all payrolls were certified by the town supervisor, and leave accruals were generally earned and used appropriately. However, the town supervisor did not adequately monitor salaries paid and benefits provided to ensure employees were paid and received benefits consistent with approved board resolutions and the CBA.

The supervisor did not maintain complete, accurate and up-to-date accounting records and reports. Although the supervisor assigned his duties for maintaining the accounting records and preparing disbursements and financial reports to a bookkeeping firm, the supervisor did not provide adequate oversight of these duties.

The supervisors did not maintain complete, accurate and up-to-date accounting records and reports. Although the supervisors assigned their duties for maintaining their accounting records and preparing disbursements and financial reports to the appointed clerk to the supervisor, the supervisors did not provide adequate oversight of these duties.

The board and village officials did not adopt realistic and structurally balanced budgets or effectively manage fund balance and reserve funds during the audit period. The board routinely overestimated appropriations, did not consistently receive or review monthly budget-to-actual reports and did not adopt fund balance or reserve policies. These practices contributed to accumulating excessive surplus funds which may indicate that taxes and fees were higher than necessary to fund operations.

District officials did not properly manage and monitor building access accounts and devices. Specifically, of the accounts auditors reviewed, the district had active, but unneeded, accounts with assigned badges in the system. As a result, there was a potential risk for unauthorized access to district school buildings.

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