Purpose of Audit

The objectives of our audit were to determine if the Board provided adequate oversight of the Villages financial operations and to review the Court’s financial operations for the period June 1, 2013 through September 30, 2014.

Background

The Village of Sag Harbor is located in the Towns of East Hampton and Southampton in Suffolk County and has a population of approximately 2,100. The Village is governed by an elected five-member Board of Trustees. Budgeted appropriations for 2014-15 were approximately $9.1 million. The Village Justice Court has two Justices, a Court clerk and an assistant Court clerk. The Justices collected $565,801 in fines, fees and surcharges during the audit scope period.

Key Findings

• Board received monthly budget status reports throughout the year, but did not address negative balances in budget line items. Therefore, the Board’s involvement in and scrutiny of the Village’s financial activities and operations was not adequate.
• The Court clerk’s financial duties – which included maintaining the Court’s accounting records, reconciling bank statements and completing required monthly reports to the State Comptroller’s Justice Court Fund – were not adequately segregated, and the Justices did not provide additional oversight as a compensating control to address the weaknesses associated with properly accounting for parking tickets.

Key Recommendations

• The Board should conduct a careful and thorough review of the monthly budget status report, investigate any budget overexpenditures and conduct a thorough audit of claims prior to payment.
• The Justices should ensure that the duties of the Court clerk and assistant Court clerk are adequately segregated. Where it is not practical to segregate duties, the Justices should provide additional oversight as a compensating control.