Purpose of Audit

The purpose of our audit was to review the Town’s financial condition and examine selected operations for the period January 1, 2011, to September 30, 2012.

Background

The Town of Lyonsdale is located in Lewis County. The Town is governed by an elected five-member Town Board composed of the Town Supervisor and four Council Members. For the fiscal year ended December 31, 2012, the Town’s reported expenditures totaled about $208,000 for the town-wide and town-outside-village general funds and $493,000 for the town-wide and town-outside village highway funds.

Key Findings

• The financial condition of the Town’s highway town-wide fund has declined in recent years from a balance of $88,293 at the beginning of 2008 to a deficit balance of $12,600 at the end of 2012. This decline in fund balance was caused by the Board not adopting realistic budgets and effectively monitoring budgets throughout the year.
• The Board has not established an effective claims auditing process to ensure all claims reviewed and approved by the Board contain adequate support to substantiate they are proper Town expenses.
• The Board did not audit the books and records of the Supervisor, Town Clerk, tax collector, and Town Justice as required.
• The Highway Superintendent does not maintain inventory records that collectively show the amount of beginning inventory, fuel purchased, fuel consumed, and the balance of fuel remaining. Our analysis of a sample of the Town’s gasoline and diesel fuel purchases and recorded usage determined that the Town is unable to account for approximately 2,510 gallons of fuel valued at approximately $8,440.

Key Recommendations

• Develop and adopt budgets that include realistic estimates for revenues and expenditures. Monitor actual results of Town operations against budget estimates throughout the fiscal year and ensure that appropriations are available before funds are expended.
• Conduct a thorough and deliberate audit of all claims against the Town.
• Conduct an annual audit of the financial records and reports of all Town officers and employees who receive or disburse money.
• Maintain inventory records that identify the beginning inventory, the quantities of fuel purchased/delivered, dispensed, and on hand. These records should be periodically reconciled to physical inventories of fuel on hand.