Purpose of Audit

The purpose of our audit was to review the Town’s processes for claims auditing and internal control over information technology (IT) for the period January 1, 2011, to August 28, 2012.

Background

The Town of Olive is located in Ulster County and has a population of 4,419. The Town is governed by a Town Board, which comprises four elected members and an elected Town Supervisor. In the 2011 fiscal year, the Town’s operating expenditures were $2,025,921 for the general fund and $1,694,561 for the highway fund.

Key Findings

• The Board does not adequately audit claims presented for payment. The Board does not require documents such as receiving reports, quotes, or bid or State and County contract information be submitted for claims review. In addition, we reviewed 73 payments and found that 27 payments totaling $24,823 did not have signed receiving documentation, and four payments that required quotes totaling $102,801 did not have the required quotes or alternate documentation.
• Internal controls over IT do not adequately protect electronic data. The Board has not adopted an acceptable computer use policy, a breach notification policy or a disaster recovery plan.

Key Recommendations

• Establish written procedures to ensure claims are properly reviewed prior to authorizing payment.
• Adopt an acceptable use policy and require system users to provide acknowledgement that they are aware of and will abide by the policy. Adopt an information breach notification policy and a comprehensive disaster recovery plan.