“We examined the Town’s financial condition, Justice Court operations, and controls over IT for the period January 1, 2010 to March 3, 2011.
New York State Comptroller Case 2011M-253
The Board has not adopted a policy and Town officials have not developed procedures to govern the level of unexpended surplus funds1 to be maintained and/or to determine whether the amount maintained is reasonable. Further, for fiscal years 2006 through 2010, the Board adopted budgets that underestimated revenues by approximately $1.4 million and overestimated expenditures by approximately $235,000, contributing to annual operating surpluses that averaged nearly $195,000. Consequently, fund balances that the Board appropriated as funding sources were never used. As of December 31, 2010, the Town has accumulated unexpended surplus funds in the general fund totaling $2,032,986, or 224 percent of the ensuing year’s general fund budget. These significant idle moneys were not used to reduce the tax levy; in fact, the amount that the fund balance increased was nearly equal to the cumulative real property taxes raised, which totaled $979,377 during that time.
Preliminary results show that the pattern of unrealistic budgeting and excessive tax levies has continued. The Town ended 2011 with a reported positive budgetary variance of $255,000, and unexpended surplus funds are estimated at approximately $1,981,000, or 217 percent of the budgeted appropriations for 2012, while taxes remain at previous levels. Lastly, the Board and Town officials did not employ long-term financial planning, which would have helped them identify the pattern of significant budget variances, take steps to balance the budget, and bring the Town’s fund balance down to reasonable levels.
We also identified weaknesses in the Justice Court’s internal controls over financial operations. There was no documentation of monthly bank reconciliations, and neither of the two Justices performed a monthly accountability analysis or reconciled their bail accounts. We also found that, because the computerized accounting records were not properly updated to reflect bail payments, the balances shown on the computerized report did not agree with those logged in the manual bail books maintained by the Court clerks, and had never been reconciled. Because of these weaknesses, the Justices have limited assurance that all moneys collected are properly recorded and accounted for, and Court funds are at risk of being misappropriated without detection or correction.
Finally, the Town’s internal controls over IT need to be improved. Town officials did not develop a disaster recovery plan, and the Town has not adopted policies and developed procedures for proper data backup and storage or for remote access by the Town’s system maintenance vendor. As a result, the Town’s computer data is at risk of damage, loss, or misuse.”
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New York State Comptroller, 3 March 2011.