Purpose of Audit

The purpose of our audit was to review the Village’s internal controls over cash receipts for the period June 1, 2011, to August 31, 2012.

Background

The Village of Dannemora is located within the Towns of Dannemora and Saranac in Clinton County. The Village is governed by a Board of Trustees which comprises a Mayor and four Trustees, all of whom are elected for four-year terms. The Village’s general, water, and sewer funds’ total budgeted appropriations for the 2012-13 fiscal year were approximately $1.74 million.

Key Finding

• The Village has informal procedures over the collection of cash receipts for water and sewer rents and property taxes. Village officials have attempted to mitigate the inherent internal control weaknesses of a small office by having a part-time Deputy Clerk-Treasurer (Deputy) collect receipts. However, weaknesses still exist because the Deputy prepares manual receipts and gives the Clerk-Treasurer all the receipts at the end of each day. The Clerk-Treasurer, who prepares the billings, also enters receipts into the accounting system, reconciles customer accounts, prepares bank deposits and reconciles bank statements without any additional verification or assistance by her Deputy. With these incompatible duties, the Clerk-Treasurer has the ability to misappropriate cash receipts without detection. The Village has not utilized the Deputy in a manner that would create some segregation of duties over the cash receipts process and the Board does not provide additional oversight to mitigate this control weakness.

Key Recommendation

• Establish procedures for the water, sewer, and property tax billing and collection processes that properly segregate duties between the Clerk-Treasurer and Deputy, and provide for periodic reconciliations and oversight.