BROADALBIN — The New York State Comptroller’s Office has issued an audit report stating the village mayor and board of trustees have not been adequately monitoring the village’s cash receipts and disbursements since at least June of 2018.
Although the Comptroller’s audit did not “disclose any discrepancies” in the village’s financial records it did determine the village did not have sufficient internal controls to monitor cash receipts and disbursements by the village’s former Clerk-Treasurer Sheila Bleyl. The report also showed adequate records do not exist to determine whether the village’s cash receipts were always deposited “intact” during the audit period from June 2018 to Jan. 2020.
“The clerk-treasurer performed all aspects of the cash receipts and disbursements processes, including collecting, depositing and recording cash receipts; preparing and signing checks for claims payments and payroll; reconciling bank accounts; and making journal entries,” reads the report. “She performed these duties without adequate review or approval by the Mayor or Board and, in some instances, without any review or approval. In addition, other than the clerk-treasurer, no one received or reviewed bank statements or canceled check images to help minimize the risk of unauthorized transactions or other errors or irregularities occurring and remaining undetected.”
Mayor Lawrence Cornell said the village board and mayor have monitored Bleyl’s handling of the village’s finances on a monthly basis, but never officially signed off on them to create a record that would show they had provided oversight. He said the village has changed that practice.
“We will and have been in communication with them about what their expectations are, and we will comply with the expectations,” Cornell said.
According to the audit report, the comptroller’s office reviewed cash receipts for the collection dates of 30 water charges and sewer rents totaling $339,467 and the deposit dates of 30 property tax receipts totaling $192,662, and found that the clerk-treasurer deposited the total amounts collected on those days and all
collections in a timely manner.
“However, because the clerk-treasurer did not maintain detailed and itemized supporting documentation, we could not determine whether the deposits were made intact,” reads the audit report.
Cornell said the comptroller’s audit was not a surprise to village officials, because they requested it.
“Who does this? We requested that audit, our clerk asked for it, because she was so confident because she was leaving office and she wanted to make sure that she left with a clean slate,” Cornell said. “They took time to explain this to us, because they’re out in a lot of different communities and they see ways that nefarious people steal. We didn’t have that problem, but they’re telling us there are some loopholes that people might use, because the workforce is so poor nowadays. Again, they didn’t find any misappropriation.”
The comptroller’s office indicated in the report that there are risks associated with a “lack of segregation” of the duties of a village clerk and village treasurer when the two positions are combined as a clerk-treasurer.
Cornell said the village is keeping the position combined, and it is being performed by Michele Rackmyre, who was trained by Bleyl for “months and months”, but is now performing the entire job.
According to the comptroller’s report Bleyl was appointed April 1, 2019 at which time Bleyl was given the position of deputy clerk-treasurer to assist and train her through the end of the audit period on Jan. 31, 2020.
Cornell said Bleyl is still partially employed by the village.
“Sheila is still employed by us part time as what we are calling a consultant, because her years of experience are very, very valuable in a small community,” he said.
“[That will continue] probably as long as she is willing to provide her expertise and help us.”
Here are some of the comptroller’s other findings:
• One village member certified the police department payrolls.
• The Superintendent for Public Works certified the department of public works payrolls.
• A review of 30 disbursements totaling $117,463 to determine whether the payments had adequate supporting documentation and were for a valid Village purpose found the payments were supported by itemized invoices, agreed to authorized vouchers for claims payments and were for valid Village purposes.
• A review of payroll amounts totaling $15,400 paid to the clerk-treasurer and seven other employees to determine whether these payroll payments were accurately disbursed as authorized found that the payroll disbursed was accurately calculated based on authorized rates and salaries
• Proper annual audits of the Clerk-Treasurer’s records were not performed
The comptroller’s office has recommended the village board either perform or contract for an annual audit of its clerk-treasurer’s records.
“The mayor told us that he and the other board members scanned the clerk-treasurer’s records, but did not know that the clerk-treasurer’s records had to be audited annually,” reads the report. “He also stated that even if he and the board members were aware of the annual audit requirement, they would not know how to perform the audit. As a result, officials could not provide us with any evidence that they confirmed the completeness or accuracy of the Clerk-Treasurer’s records as part of their review.”
Cornell said the village is in discussions with the state about how to perform an annual audit in-house without having to spend money on an outside firm. He said if the village does the audit it will have to create an annual report.
He said he agrees with the comptroller’s findings and recommendations and he is pleased the audit found no examples of wrongdoing or malfeasance.
“If they felt something was wrong, they would have reported it, and there was nothing wrong with the amount of money,” he said. “They spent months there digging through records, and all they could come up with was the lack of us not signing things when we’re reviewing them, versus what their expectations were. I’m pleased with that, and we’ve already put corrective actions in place.”
Village Trustee Susan DeRocker said the board has always reviewed the monthly reports from the village clerk-treasurer during her tenure on the board. She also said the board has never discussed any of the findings of the comptroller’s report or any corrective actions to take regarding it.
“We got an excellent review,” she said.
DeRocker was surprised when she read the key findings of the audit report regarding a lack of adequate control procedures at the village.
“We never even discussed that to my knowledge, because I just wasn’t aware of that,” she said. “I guess I have no comment. I would have to look further into it.”
Trustee Steven Murray said he believes some changes will be made in how the village does business.
“I’m sure there will be some adjustment. I’m not sure what that would be, you’ll have to bring that up with the mayor,” he said.
According to the audit, the village had $633,700 worth of budgeted costs for the 2019-20 fiscal year, and also had $1.7 million worth of disbursements. During the audit period the village had water charges and sewer rents totaling $360,000 and property tax collections totaling $798,800.