Purpose of Audit

The purpose of our audit was to determine if the Board and Supervisor provided adequate oversight over Town financial operations, accounting functions and information technology to properly account for and safeguard Town assets for the period January 1, 2010, through August 9, 2012.

Background

The Town of Hamlin is located in Monroe County and had a population of 9,045. The Town is governed by the Town Board, which comprises four elected members and an elected Town Supervisor. Budget appropriations for 2012 were approximately $3.8 million.

Key Findings

• The Board did not provide the necessary guidance to the Supervisor and employees, and did not establish internal controls that ensured the Town’s financial activity was accurately recorded and reported. The Board did not ensure that the Supervisor assigned accounting duties to properly trained personnel or that those duties were adequately segregated and performed.
• The Board did not annually audit the records and reports of the Supervisor, or other departments, audit all claims before they were paid, and had not established adequate controls over credit card use.
• The Town’s accounting records and resultant financial reports were in considerable disarray. For example, the Town failed to accurately report the cash position of any Town fund in its annual report to the Office of the State Comptroller (OSC).
• The Board has not established adequate policies and procedures related to acceptable use, breach notification, or disaster recovery.

Key Recommendations

• Adopt and implement comprehensive policies and ensure Town officials develop procedures to adequately segregate financial accounting and reporting duties.
• Conduct an annual audit of the records and reports of the Town Supervisor, and all other departments which receive and disburse cash. Continue to thoroughly audit and approve claims prior to payment, including all credit card purchases.
• Monitor the Town’s financial activity to ensure it is accurately recorded and reported on a timely basis. Insist that the necessary financial reports from the Supervisor are received each month.
• Adopt an acceptable use policy, information breach notification policy and a disaster recovery plan.