Purpose of Audit

The purpose of our audit was to review the Town’s management practices for the period January 1, 2012 through October 16, 2013.

Background

The Town of Caledonia is located in Livingston County and is governed by an elected Town Board comprising a Supervisor and four Board members. The Town’s 2013 budgeted appropriations totaled approximately $1.29 million.

Key Findings

• The Board did not develop policies and procedures for budget preparation and monitoring and, as a result, repeatedly adopted budgets with inaccurate estimates for revenues, expenditures and appropriated fund balance.
• The Supervisor did not provide each Board member with budget-to-actual reports to monitor the budget throughout the year.
• The board did not appropriately allocate the Deputy Highway Superintendent’s compensation, placing an inequitable burden on town-wide taxpayers.
• The Board did not establish sufficient controls over payroll records and leave time. Employees did not keep daily time records of regular and overtime hours worked or leave time used, and did not formally request leave time usage. Payroll reports did not include leave time usage, and inaccurately reported all paid hours as hours worked.

Key Recommendations

• Adopt policies and procedures for the budgeting process, and develop and adopt budgets with realistic estimates of revenues and expenditures, and appropriation of fund balance only in amounts that are available and necessary to fund operations.
• Provide the individual Board members with interim detailed budget-to-actual reports for their use in monitoring revenues and expenditures throughout the year.
• Adopt budgets with equitable allocation of the Deputy Highway Superintendent’s wages in the proper fund.
• Establish payroll policies and procedures requiring employees to prepare daily time records for all regular and overtime hours worked and leave time used. Ensure that accurate leave records are maintained and accruals and leave used are in accordance with Board authorizations.