Purpose of Audit
The purpose of our audit was to examine the Board’s oversight of Village financial activities and the Treasurer’s duties for the period January 1, 2009, to July 31, 2012.
Background
The Village of Old Field is located in the Town of Brookhaven, in Suffolk County, and has a population of approximately 900. The Village is governed by an elected Board of Trustees comprising a Mayor and four Trustees. Village general fund expenditures for the 2011-12 fiscal year were approximately $976,000, funded primarily with real property taxes.
Key Findings
The Board did not provide sufficient oversight of the financial duties performed by the former Treasurer, allowing the apparent misappropriation of over $59,000 in Village funds without detection. This occurred because the Board allowed the former Treasurer to perform all cash disbursement duties with no oversight.
- The Board did not review the bank statements or the bank reconciliations. Further, the former Treasurer did not maintain accurate financial records.
- The Board did not audit and approve claims prior to payment and did not provide for an audit of the former Treasurer’s financial records for the fiscal years ended February 28, 2011 and February 28, 2012.
- The Board did not require the former or current Treasurer to provide monthly financial reports for monitoring cash flow and fund balance and, therefore, was unable to adequately manage the Village’s operations and fiscal health.
- Although the Board did not pass a resolution establishing a petty cash fund, the former Treasurer issued and cashed 36 petty cash checks that averaged approximately $340 each.
Key Recommendations
- Take appropriate action to recover all misappropriated moneys and improper payroll payments.
- Review the bank statements and reconciliation on a monthly basis. Maintain adequate, timely, and reliable financial records and reports.
- Audit and approve all claims prior to payment.
- Monitor financial activities by requiring and reviewing detailed monthly financial reports.
- Pass a resolution to establish a revolving petty cash account, as required by law.