Purpose of Audit

The purpose of our audit was to evaluate internal controls over purchasing for the period January 1, 2012, through April 26, 2013.

Background

The Town of Lyndon is located in Cattaraugus County and has 700 residents. The Town is governed by a five-member elected Town Board, which comprises the Town Supervisor and four Councilpersons. For the 2012 fiscal year, budgeted appropriations totaled $184,000 for the general fund and $323,000 for the highway fund.

Key Findings

• The Board did not adopt a procurement policy as required. In August 2011 the Board adopted a resolution stating that although it is understood that the Town is required to have written policies, the resolution directed Town officials to consult the Office of the State Comptroller’s publications for guidance. However, this resolution did not satisfy the requirement to adopt a written procurement policy, where the Board would specify the number of written or verbal quotes or bids to be obtained for various dollar thresholds, among other things.
• The Board annually adopted resolutions requiring that it approve all purchases costing more than $1,500; however, these resolutions made no mention of quotes or bids to be obtained prior to such approval. The Highway Superintendent indicated that he obtained quotes for certain purchases, but did not retain them or attach them to the claim for review by the Board prior to payment.

Key Recommendations

• Adopt and annually review a purchasing policy, in accordance with statutory requirements, to provide guidance for Town officials when making Town purchases.
• Ensure that Town officials are properly adhering to the competitive bidding requirements and monitor compliance with the adopted policy before approving purchases.