Purpose of Audit

The purpose of our audit was to examine internal controls over the financial condition of the water district fund and Justice Court operations for the period January 1, 2012 through December 31, 2013.

Background

The Town of Westerlo is located in Albany County and is governed by a Town Board comprising the Town Supervisor and four elected members. The Town’s budgeted expenditures for the 2013 fiscal year are approximately $2.7 million.

Key Findings

• The Board and Town officials did not take appropriate action to align estimated revenues in the adopted budgets with actual rate schedules. This resulted in an accumulated operating deficit. Furthermore, the water district fund owed the general fund a cumulative balance of $66,388 as of December 31, 2013. The Board continued its inaccurate budgeting practices with the 2014 budget, which makes it unlikely that the water district fund will be able to begin to repay the general fund or improve its financial condition.
• The Board has not adopted multiyear financial plans to address the water district fund’s deficit fund balance or the outstanding interfund loans. Furthermore, the Board has not established a repair reserve for the water district fund in anticipation of future repair costs.
• There was no documentation to confirm that Justice Carl performed monthly bank reconciliations. We also found that neither Justice reconciled the bail account bank balances with the computerized bail reports.

Key Recommendations

• Develop realistic and accurate estimates in preparing the annual budget and monitor the budget during the year. Develop a comprehensive plan to ensure that all outstanding interfund advances are repaid.
• Develop a multiyear financial plan to establish clear goals and objectives for funding the water district fund’s long-term operating and capital needs.
• Prepare monthly bank reconciliations and analyses of Court liabilities for comparison with available cash. Ensure that all bail received and disbursed is properly accounted for.