Purpose of Audit

The purpose of our audit was to evaluate the Town’s financial management for the period January 1, 2007 to December 31, 2012 and the internal controls over claims processing for the period January 1, 2011 to August 31, 2012.

Background

The Town of Mansfield is located in Cattaraugus County and has approximately 800 residents. The Town is governed by an elected five-member Town Board (Board) consisting of the Town Supervisor and four councilpersons. The Town’s 2012 budget totaled approximately $1 million.

Key Findings

• The Board adopted budgets using fund balance to reduce the tax levy with no systematic approach to ensure that appropriated amounts were available. Because of this, both the general and highway funds experienced significant declines in fund balance from the 2009 to the 2011 fiscal years. For 2013 Town officials took steps to correct their budget deficiencies, which should eliminate the operating deficits in the general and highway funds.
• The Board does not perform a proper audit of claims. We found that certain claims lacked itemization and documentation to support that they comply with Town policies and that they represent actual and necessary Town expenses. We also found that the Supervisor was inappropriately paying claims prior to Board audit.

Key Recommendations

• Establish a policy for the appropriate level of unexpended surplus to maintain in each fund, and for determining the amount of unexpended surplus, if any, to appropriate in the ensuing year’s budget.
• Establish a policy and develop procedures to help ensure claims are properly supported and audited prior to payment. Require that all claims contain adequate supporting documentation and are properly itemized prior to being presented to them for audit. Do not pay any claims which have not been audited and approved for payment by the Board, except where allowed by law.