State audit sheds light on town of Mohawk’s sloppy finances

PHOTOGRAPHER: John Enger

Town of Mohawk officials were confused enough about their finances to welcome a recent audit from the state Comptroller’s Office.

“We’ve been using the same financial system for the last 30 years,” said Town Supervisor Gregory Rajkowski. “The last supervisor got it from the supervisor before, then showed me. There were some problems with it we were happy to learn about.”

An audit report released by the office of state Comptroller Thomas DiNapoli Thursday went into greater detail about those problems.

The main issue, according to the report, was commingling of funds. Town money is kept in separate bank accounts based on where it’s going. There’s a townwide general fund, another for town expenses excluding the village of Fonda, and others for highway and streetlight costs.

The problem is, money was moved between those accounts, largely without documentation.

“When you move money around between funds,” said comptroller spokesman Brian Butry, “eventually you get to a place where you’re not actually sure how much money you have.”

According to the report, Andrea Piscione, the town bookkeeper, overstated snow removal costs by $46,000 at one point while decreasing recorded highway improvement costs by the same amount, essentially moving the money around. There were a number of similar moves taken between July 1, 2011, and Dec. 31, 2012, the period audited.

The audit also pointed out Rajkowski’s failure to bring accurate monthly reports to the Town Board and to perform year-end account closures.

What Butry called “general poor bookkeeping practices” led to two main issues:

Since different services are offered in the village of Fonda than in the town of Mohawk, separate taxes are collected from village and town property owners. The money should be kept in separate accounts and spent on separate things.

“We put all of our money in the general fund,” Rajkowski said, “and shuttled it around from there.”

Such commingling could lead to tax inequality.

“You could end up with village residents paying for town services they’re already paying for in the village,” Butry said.

Rajkowski said that never happened in his town.

Poor bookkeeping also leads to financial confusion. The town’s roughly $1.5 million budgets in 2011, 2012 and 2013 all relied to some degree on the fund balance, its rainy day fund of unspent money from previous budget years.

The audit found the fund balance to be at roughly $1.6 million at the end of 2012, but also noted the Town Board had no idea of its size when approving the budgets.

The audit found no fraudulent actions on the part of the town, just a lack of financial know-how. “This is really common in small, rural municipalities,” Butry said. “This is one of the reasons we do audits.”

The report suggested Rajkowski adjust the movement of money between accounts to prevent commingling, present accurate financial reports to the board and develop procedures to keep track of how much money the town actually has at any given point — all things Rajkowski said he’s willing to do.