Purpose of Audit

The purpose of our audit was to determine whether the Town has established adequate controls over financial operations and reporting for the period January 1, 2011, to October 3, 2012.

Background

The Town of Davenport is located in the County of Delaware and has 2,965 residents. An elected five-member Town Board, comprising the Town Supervisor, and four Board members, governs the Town. The Town’s annual budget for the 2013 fiscal year is $1,143,925.

Key Findings

• We identified discrepancies totaling $4,800 in the Supervisor’s cash receipt records, and found that the Supervisor paid claims totaling $54,000 that had not been reviewed and approved by the Board.
• The Supervisor collected water rents and permit fees instead of having the collections done by the Town Clerk and the recordkeeping by the Supervisor. The Supervisor authorized Town payments, maintained Town financial records, and collected and deposited Town moneys.
• The Supervisor also provided inadequate financial information to the Board, and failed to file the Town’s annual financial report with the Office of the State Comptroller (OSC), as required.
• Because Board members did not request cash receipt and disbursement data or conduct an annual audit of the Supervisor’s records, they did not identify the above discrepancies or realize that the Town had not filed its annual report with the OSC.

Key Recommendations

• Segregate incompatible duties related to cash receipt and disbursement functions. Account for the discrepancies identified in permit fee revenues.
• Ensure that all claim vouchers are presented to the Board for audit and approval and that all such claims appear on an abstract.
• Ensure that the Supervisor provides complete, accurate, and up-to-date financial records to the Board.
• Annually audit the Supervisor’s records, as required. File annual financial reports with OSC in a timely manner.