Audit shows lack of fiscal oversight in Cairo
State Comptroller’s examination of fiscal 2007 reveals weaknesses
The Daily Mail
May 20, 2009
CAIRO — The office of the state Comptroller released Tuesday the findings of a recent audit of the Town of Cairo that shows “weaknesses in internal controls over virtually every aspect of the Town’s fiscal operations.”
The audit was conducted through a series of interviews with Town officials and reviews of documents including employee handbooks and policy manuals, budgets, receipts, bank statements, claim vouchers and personnel files from Jan. 1, 2007 to Dec. 31, 2007 and samplings of earlier documents.
The audit presented no evidence of fraud, theft or professional misconduct.
According to the report, Town and Board records revealed oversight shortcomings concerning payrolls and withholdings, appropriations and bookkeeping during the audit period.
“We found no evidence that the Board had audited the financial records and reports of the Supervisor or other Town officers and employees who received or disbursed moneys on behalf of the Town for the 2006 and 2007 fiscal years,” the audit read.
Auditors found that three employees were paid greater hourly rates than those approved by the Board.
The Town did not appropriately administer health care deductions for two employees, according to the report.
An audit of 23 withholdings and remittances the Town made to the government and to vendors for retirement, deferred compensation, accident insurance, life insurance and union dues revealed five errors for between $63 and $813.
The report states that the amount of money withheld for union dues from 10 employees was less than the amounts remitted by $813.
Auditors reported that pay rate changes were not reported to the union treasurer in a timely manner, resulting in an incorrectly calculated rate for union dues withheld.
A review of 152 general and highway appropriation accounts active in 2007 showed that 41 of those accounts were over-extended by a combined total of $222,044.
In 2007, water fund appropriations were overexpended by $14,575 and sewer funds by $9,234, the audit report claims.
The combined water, sewer, lighting and hydrant district’s fund balances decreased $125,561, from a surplus of $90,266 on Dec. 31, 2003 to a deficit of $35, 295 on Dec. 31, 2007, according to the audit report.
Of 61 purchase claims sampled in the audit, 31 purchase claims totaling $201,436 lacked proper documentation to prove that goods and services were received, auditors reported.
Auditors also reviewed reports submitted by former Town Supervisor Joseph Calcavecchia.
According to the report, the audit indicated that Calcavecchia did not authorize bank transfers totalling $990,864.
The report said that Calcavecchia did not keep timely and accurate accounting records. For example, the audit showed that more than $21,000 of receipts were posted to incorrect revenue accounts.
Calcavecchia did not respond to a request for comment Tuesday.
Town Supervisor John Coyne defeated Calcavecchia in 2007 by a vote of 1,213-780.
Coyne said Tuesday he began implementing number of the recommendations made by the Comptroller’s Office when he took office in January 2008.
For example, a bookkeeper was hired and the tasks of billing, collecting and depositing water and sewer payments was split between three employees, he said.
He said account checkbooks are balanced and financial records have been audited by the state and an outside auditor.
Examiners found that of 22 purchases sampled in the audit, 21 purchases, totaling $166,070, were made without evidence of employees having obtained written or verbal quotations, that they sought price comparisons or that they used any other price comparison methods. Coyne said a sewer filter purchased at the end of 2007 was one purchase that had not properly gone out to bid. The purchase process was begun anew in 2008, he said.
Coyne said that before he took office he had been unaware of issues with the development and implementation of procedures to document water and sewer billings presented to the Board within the minutes.
Coyne said was unaware the Board had problems with documenting financial statements presented to the Board in the minutes. He said he will discuss the inclusion of these statements as well as the water and sewer bills with the Board at tonight’s Board meeting.
He said the Town has not established policies and procedures regarding use and security of the Town’s information technology system, as per the Comptroller’s request.
“It needs to be addressed,” he said.
Councilwoman Alice Tunison, who served on the board during the period audited, said she recalled board meetings at which audience members would inquire about bids and vouchers.
“Things of similar nature were discussed at our meetings,” she said.
She said the Town has hired a thorough and conscientious bookkeeper.
“Things are changing,” she said.
The Board must present a corrective action plan to the Comptroller within 90 days.
The complete audit report can be downloaded from the Comptroller’s Website at www.osc.state.ny.us/localgov/audits/towns/2009/cairo.pdf - 2009-05-18.