Purpose of Audit

The objectives of our audit were to review the Town’s internal controls over the Justice Court’s (Court) financial operations and the Highway Department’s payroll for the period January 1, 2014 through January 31, 2015.

Background

The Town of Malone is located in Franklin County and has a population of approximately 14,500. The Town is governed by an elected five-member Town Board. The Town’s budgeted appropriations for the 2015 fiscal year are approximately $3.57 million. The Town has two elected Justices and two Court clerks with financial responsibilities related to Court Operations. The Justices remitted $327,797 in fines, fees and surcharges to the Supervisor in 2014.

Key Findings

• Justices did not properly segregate the cash receipt duties and did not provide oversight for receiving, depositing, recording and reporting cash receipts.
• Accurate and complete bail records were not maintained.
• The lack of an annual audit of the Court’s records allowed the Court to maintain inaccurate records and allowed for discrepancies to occur and remain undetected.
• Town officials did not establish comprehensive policies and procedures to provide proper guidance or implement sufficient compensating controls over employees’ leave accrual records.

Key Recommendations

• Segregate duties over cash receipts or establish appropriate compensating controls, such as their own monthly reviews of Court records.
• Ensure that accurate and complete lists of bail held and disbursed are maintained.
• Annually audit or cause an audit of the Court’s records and document the results of the audit in the Board minutes. The Board should also consider providing more frequent monitoring of the Court’s activities.
• Establish comprehensive payroll processing and leave time accrual policies and procedures that incorporate the duties to be completed and records to be maintained for processing payrolls and maintaining leave records.