The Steuben Courier Advocate
  • Town of Pulteney receives audit

  • The Town of Pulteney, in Steuben County, has received its audit from the State Comptroller’s Office, and it contains calls for corrective action in budgetary practices, and computer use and security.

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  • The Town of Pulteney, in Steuben County, has received its audit from the State Comptroller’s Office, and it contains calls for corrective action in budgetary practices, and computer use and security.
    In her reply to the auditors, Pulteney Supervisor Jane Russell wrote, “Upon my election for a term that began in 2012, the budget was a primary concern.” She says that she and the bookkeeper meet with each department head, and they build each budget from the ground up. The water rate was increased “to accommodate the actual cost of Pulteney’s indebtedness for the water system (and) repay in full the Village of Penn Yan for water contracted prior to 2012.” No late charges had ever been added to water bills. That policy was added in the last quarter of 2012.
    In an interview, Russell adds, “I knew the fee structure for the water department was wrong even when I was a private citizen. The board is now establishing budget policies that will be followed no matter who is elected in the future.”
    The town provides various services to its 1,285 residents including water, street maintenance, and snow removal services and general government support.
    • AUDIT, Pg. 5
    The town’s 2012 general, highway, and water district appropriations totaled approximately $1.29 million, which were funded primarily by real property taxes, sales tax, state aid, fees, and water rents.
    The objective of the audit was to review the town’s financial management and controls over information technology (IT) for the period Jan. 1, 2010, through May 30, 2012, according to the document released by the office of State Comptroller Thomas DiNapoli. The scope was expanded back to 2007 and forward to Dec. 31, 2012, to review the town’s fund balance levels and budgeting trends, and addressed the following related questions:
    • Does the board adopt realistic budgets, routinely monitor financial operations, and take appropriate actions to maintain the town’s financial stability?
    • Did the town ensure that its computer hardware, software, and data were adequately safeguarded?
    The audit finds that during the last two fiscal years, Pulteney’s financial condition has improved, primarily the result of hiring a bookkeeper who has “enhanced the development and monitoring of the annual budgets adopted by the Board by helping the board overcome a lack of established budgetary guidance.”
    Auditors found that in previous years, the board adopted budgets with “inaccurate revenue and expenditure estimates and appropriated fund balance that was not available. As a result, the financial condition of the general, water district, and highway funds had declined significantly between 2007 and 2010, resulting in cash shortages.”
    They praised the board for improvements in its 2012 and 2013 budgets, including increasing water rates and reducing or eliminating the appropriation of fund balance, and improved operating results for 2012, but the criticisms of fiscal procedures was firm:
    “However, the lack of detailed policies and procedures creates the risk that these improvements will not continue if town personnel changes again,” write the auditors in their report.
    Page 2 of 3 - “In addition, we found that the board has not adopted forml policies, and the Supervisor has not developed detailed procedures, for ensuring that financial duties are adequately segregated or that sufficient review and oversight procedures are in place. Furthermore, the board did not perform an audit of the water department and did not maintain adequate documentation of its audit of the records and reports of the Supervisor, Town Clerk, and Town Justice,” the auditors write.
    The auditors require the board to submit a written corrective action plan (CAP) that addresses the findings and recommendations to their office within 90 days, and to make the plan available for public review in the Town Clerk’s office., addressing the following recommendations:
    1. The board should adopt and implement detailed policies and procedures for preparing realistic and structurally balanced budgets, using actual financial results from prior years and other relevant and available data.
    2. The board should continue to appropriate fund balance only in amounts that are actually available, after retaining a reasonable amount for the ensuing year.
    3. The board should continue to monitor and adjust water rates as necessary to raise sufficient revenues to cover current operations and cash flow needs and repay arrears to the village of Penn Yan and the interfund loan owed to the general fund.
    4. The board should adopt written policies and the town supervisor should establish procedures to ensure that financial duties are adequately segregated and/or supervisory oversight controls are in place.
    5. The board should conduct an annual audit of the records of the town clerk, supervisor, town justice, and water department. The board should ensure that documentation of the results of the audits is filed with the minutes of its proceedings.
    Computers and Information
    6. The board should adopt an acceptable use policy relating to IT access and computer use by town officials, employees, and vendors who access the system.
    7. The board should establish written policies and procedures that provide well-designed internal controls over online banking, including adequate segregation of duties and independent review and prior approval of transactions.
    8. The town should enter into a comprehensive agreement with thetown’s bank that establishes the process to be followed for initiation, approval, and processing of electronic funds transfers and identifies the names and numbers of the bank accounts from which such transfers may be made.
    9. The board should review, or designate someone to review, adjustment reports from the water billing software and reports that describes deletions and changes made in the financial software used by the bookkeeper.
    10. The board should adopt an information breach notification policy.
    11. The board should develop and adopt a formal disaster recovery plan that documents steps to be taken in the event of an emergency.
    Page 3 of 3 - 12. The board should require that an inventory of the Town’s electronic equipment be completed and regularly updated.
    13. The board should establish a policy to ensure that hard drives and other electronic media are properly sanitized before they are disposed of.

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