Purpose of Audit

The purpose of our audit was to review the Village’s financial condition and selected financial operations for the period March 1, 2012 to March 18, 2013.

Background

The Village of Deposit is located in Delaware County and has a population of 1,663. The Village is governed by an elected five-member Village Board comprising the Village Mayor and four Trustees. The Village’s 2013-14 budgeted appropriations totaled $1.9 million.

Key Findings

• The Board did not ensure that it received complete and accurate reports from the Clerk-Treasurer. In fact, we found several material errors in the maintenance of the accounting records and related reports. As such, the Board did not have accurate information with which to base its financial decisions and, ultimately, did not adopt reasonable budgets for the general, water and sewer funds.
• Inaccurate budgeting and lack of monitoring have caused fund balance to decline in the general and sewer funds. While the Village’s funds currently have positive unexpended surplus fund balances, if the Board continues to accept inaccurate financial reports, base its decisions on unreliable information, and not monitor results of operations, the Village could enter into fiscal stress.
• The Board cannot be sure that only authorized disbursements (including payroll) were made, that all moneys received were properly deposited, or that all transactions were properly recorded and reported. There were 58 disbursements totaling more than $217,000 made and payroll benefits provided without Board approval.
• The Clerk-Treasurer and her Deputy perform most aspects of the cash receipt and disbursement functions without independent oversight.

Key Recommendations

• Prepare and provide the Board with complete and accurate financial records and reports, including reporting monthly budget-to-actual comparisons and cash balances.
• Adopt reasonable budgets based on previous years’ actual activity. Monitor the budget-to-actual results throughout the year and amend the budget prior to exceeding appropriations or not fully receiving expected revenues.
• Establish procedures to ensure that the Board reviews, audits and approves all claims against the Village. Ensure that all salaries paid and benefits provided are in accordance with Board-approved amounts, and such approval is documented.
• Provide adequate fiscal oversight when one person performs all aspects of the cash receipts and disbursements duties.