Purpose of Audit

The purpose of our audit was to determine if Town officials established effective internal controls over Town finances and Highway Department payroll for the period January 1, 2010 through July 31, 2015.

Background

The Town of Rochester is located in Ulster County. The Town, which has approximately 7,300 residents, is governed by an elected five-member Town Board. The Town also has an elected Highway Superintendent who is responsible for overseeing all highway operations. Budgeted appropriations for the 2015 fiscal year totaled approximately $1.9 million for the general fund and $1.4 million for the highway fund.

Key Findings

• The Board did not adopt structurally balanced budgets over the five years from 2010 through 2014 and Town officials overexpended certain highway fund budget items each year.
• The Town does not have comprehensive policies and procedures for preparing payroll and maintaining leave time accrual records for Department employees and Town officials did not provide adequate oversight.
• Employees did not always use the time clock to clock in and the Superintendent was unable to provide examiners with records documenting employees had received prior authorization to work overtime, Town officials do not have adequate assurance that the hours submitted by the employees for overtime were actually worked.

Key Recommendations

• Adopt accurate budgets with reasonable estimates of revenue, expenditures and fund balance and monitor the highway fund’s operating expenses throughout the year to prevent overspending the budget.
• Develop written policies or procedures regarding how hours worked are to be recorded consistent with CBA provisions.
• Confirm that overtime is adequately documented according to the CBA and that employees receiving overtime pay report to work and document their presence on their timecards.