Purpose of Audit

The purpose of our audit was to assess internal controls over Town Clerk operations for the period January 1, 2011, to June 30, 2012.

Background

The Town of Florida is located in Montgomery County and has a population of approximately 2,700. The Town Board, which comprises four elected Board members and an elected Town Supervisor, governs the Town. In 2010, 2011 and 2012, the adjusted warrants from the County totaled $2.3, $2.6 and $2.6 million, respectively.

Key Findings

• We found that at least $19,107 of taxpayer funds were missing from 2010 through 2012. We also identified that the Clerk transferred money between accounts under her control to cover up these shortfalls. During our audit, the Clerk expressed that she had concerns that a family member was gaining access to taxpayer funds and removing them from her possession.
• Because the Clerk did not maintain adequate, accurate and complete records and reports or physically secure collections, there may have been transactions that were not accounted for and additional moneys missing. We were unable to determine if this was the case or quantify additional missing moneys because the records were so poorly maintained.

Key Recommendations

• Record each tax payment received in a cash receipts journal itemizing the payment date, taxpayer property, taxes paid, and any interest and penalties paid on the tax bill. Reconcile records of collections with deposits. Provide oversight of the tax collection process, including reviewing finalized tax rolls and County settlement statements.
• Record the payee names and amounts in the cash receipts journal and ensure that the dates received in the cash receipts journal correspond to the days of collection instead of the days when the collections were batched for deposit. Record deposits made in the accounting records and distinguish whether receipts were received in cash or by check, both on deposit slips and in the accounting records. Provide oversight of the Clerk’s operations by conducting an annual audit of the Clerk’s records and reports detailing collections for real property taxes and Town fees. The Board should also consider providing more frequent monitoring of the Clerk’s activities. Ensure collections are physically secured in a locked vault or other locked storage medium and should ensure access to collections is limited.