Purpose of Audit

The purpose of our audit was to review non-payroll cash disbursements and internal controls over fuel inventories for the period January 1, 2011, through May 31, 2012.

Background

The Town of Alexandria is located in Jefferson County and has a population of about 4,000. The Town Board comprises four elected members and a Supervisor. The Town’s 2012 budgeted operating expenditures totaled $3.8 million.

Key Findings

• The Town’s non-payroll cash disbursements were not always properly authorized, adequately supported or in compliance with statutory requirements. The former Supervisor improperly paid 20 claims totaling $19,919 without the audit and approval of the Board. These disbursements included 10 payments totaling $1,819 that she made to herself for the reimbursement of expenses and nine payments totaling $18,100 that were made to vendors for publicity.
• The Town made payments totaling $60,000 to the Chamber of Commerce and $6,087 to the Chamber’s vendors without entering into written contracts stipulating what services or benefits the Town was to receive for the payments.
• The Town paid $45,000 to a law firm of which the Town Attorney is a shareholder. The Town Attorney may have a prohibited interest in the contact between the Town and his law firm.
• Internal controls over fuel inventories also need to be improved. Our review of fuel records from June 2011 through December 2011 disclosed that about 4,500 gallons of fuel valued at about $14,600 were not accounted for.

Key Recommendations

• Require that all claims contain adequate supporting documentation and proper itemization prior to being presented for audit.
• Enter into written agreements with the Chamber of Commerce that outline the services or benefits the Town is to receive for the payments it makes to or on behalf of the Chamber.
• Ensure that the Town does not enter into any contract in which a Town officer or employee has a prohibited interest.
• Maintain perpetual inventory records that identify the beginning inventory, and the quantities of fuel purchased/delivered, dispensed, and on hand. These records should be periodically reconciled to physical inventories of fuel on hand.