Purpose of Audit

The purpose of our audit was to examine internal controls over selected Town financial operations for the period January 1, 2011, to September 30, 2012.

Background

The Town of Coeymans is located in Albany County and has a population of approximately 7,400 residents. The Town is governed by an elected five-member Town Board which comprises the Town Supervisor and four Board members. The Town’s 2012 fiscal year budget totaled $6.4 million.

Key Findings

• The Town’s financial report did not properly reflect the true financial condition of the sewer district fund. On its 2011 annual financial report, the Town reported an unrestricted fund balance deficit of $230,368 in the sewer district fund. If the necessary adjustments were made the Town would have reported a positive fund balance of $451 in the sewer district fund.
• The payroll clerk’s duties are not properly segregated. The payroll clerk’s duties include making changes to salaries and wages but she is also capable of submitting data changes directly to the payroll-processing contractor without approval, and there is no comparison of the amounts of the payroll checks to the payroll journals after they are prepared.
• The Town’s blank check stock is not secured and there is no comparison between the abstracts and checks when they are signed.
• The Town’s payroll-processing contractor and postage-servicing contractor made withdrawals directly from the Town’s bank accounts.

Key Recommendations

• Review the suggested adjustments to the sewer fund balance and take action it deems proper.
• Ensure there is an adequate segregation of duties for vendor payments or institute compensating controls.
• Ensure that blank check stock is adequately secured.
• Discontinue the practice of permitting vendors to withdraw funds directly from the Town’s bank accounts.