blooming

Document Sample
blooming Powered By Docstoc
					                                        STATE OF NEW YORK                             MARK P. PATTISON
ALAN G. HEVESI
 COMPTROLLER                 OFFICE OF THE STATE COMPTROLLER                       DEPUTY COMPTROLLER
                                         110 STATE STREET               DIVISION OF LOCAL GOVERNMENT SERVICES
                                      ALBANY, NEW YORK 12236                      AND ECONOMIC DEVELOPMENT
                                                                            Tel: (518) 474-4037 Fax: (518) 486-6479




                                                      September 15, 2006

  Mr. Charles J. Bohan, Town Supervisor
  And Members of the Town Board
  Town of Blooming Grove
  6 Horton Road
  Blooming Grove, NY 10914

  Report Number: 2006M-90

  Supervisor Bohan and Members of the Town Board:

  One of the Office of the State Comptroller’s primary objectives is to identify areas where local
  governments can improve their operations and provide guidance and services that will assist
  local officials in making those improvements. Our goals are to develop and promote short-term
  and long-term strategies to enable and encourage local government officials to reduce costs,
  improve service delivery and to account for and protect their entity’s assets.

  In accordance with these goals, we conducted an audit of the $250,000 grant the Town of
  Blooming Grove (Town) received from the State of New York in March 2001 to determine
  whether the Town used the grant for its stated purpose.

  This report of examination letter contains our findings and recommendations specific to the
  $250,000 grant. We discussed the findings and recommendations with appropriate officials and
  considered their comments in preparing this report. The official response is attached to this
  report in Appendix A. Town officials generally agreed with our findings and recommendations.

  Background, Scope and Methodology

  The Town is located in Orange County, New York. The Village of Washingtonville is located
  within the Town. The Town has a population of approximately 18,196 with a general fund
  budget of $3.47 million and overall budget of $11.3 million.

  The Town Board (Board) is responsible for establishing policies and ensuring that the policies
  are followed. The Town Supervisor (Supervisor) is the chief fiscal officer and is responsible for
  policy execution and the daily operations of the Town. Part of the Supervisor’s responsibilities
  is to maintain accurate and complete accounting records.
In 1999, Town residents suffered flood related damages to homes as a result of Hurricane Floyd.
In response to the damage, State Senator William Larkin requested $250,000 for the Town’s
flood prevention initiatives. Senator Larkin requested the funds to assist with the buy-out of
condemned homes pursuant to FEMA recommendations. In response to the Senator’s request,
the Town received a check for $250,000 from the State in March 2001.

We audited the Town’s use of the $250,000 State grant it received from the State. As part of our
audit, we interviewed appropriate Town officials, reviewed pertinent documents, including bank
statements and accounting records for the period January 1, 2001 to February 28, 2006. We also
reviewed the grant documents. Our audit was initiated at the request of the current Supervisor
who was elected in November 2001 and took office in January 2002.

We conducted our audit in accordance with Generally Accepted Government Auditing
Standards. Such standards require that we plan and conduct our audit to assess adequately the
operations within our audit scope. Further, these standards require that we understand
management controls and compliance with laws, rules and regulations that are relevant to the
operations included in our scope. An audit includes examining, on a test basis, evidence that
supports the transactions recorded in the accounting and operating records and applying such
other auditing procedures, as we consider necessary in the circumstances. We believe that our
audit provides a reasonable basis for our findings, conclusions and recommendations contained
in this report.

Audit Results

We found that the Town did not use the $250,000 grant for its intended purpose of buying
condemned homes or for site remediation of the flooded areas. Instead, Town officials
commingled the $250,000 with other Town funds and used it for unrelated purposes, the exact
nature of which we cannot conclusively determine.

We examined the Town’s financial records for the period January 1, 2001 to February 28, 2006.
During this period the Town was not audited by an independent auditor. We attempted to trace
the use of the $250,000 by analyzing bank statements in conjunction with the Town’s account
ledgers. Town officials maintained approximately 180 different bank accounts in 2001 and
2002, an excessive number. When the $250,000 was received, it was deposited into the general
fund account. After the deposit, we were unable to further trace the grant money through the
Town’s bank accounts. As a result, there was no clear audit trail for us to determine how this
money was accounted for and used.

We also attempted to trace the $250,000 through the Town’s accounting records. When the
$250,000 was received, it was recorded as miscellaneous general fund revenue in March 2001.
We reviewed the Town’s budgeted and actual expenditures from January 1, 2001 through
December 31, 2002 for all funds. We found no general fund budgetary appropriation or actual
expenditure related to the expenditure of grant proceeds. Our review of Board minutes, abstracts
and claims from the period January 2001 through May 2006 disclosed no payments that would
be associated with the grant for buying condemned homes or for site remediation of the flooded
areas. However, we found that the Park Fund was allocated $33,600 in the 2001 budget and the



                                               2
actual expenditures for the Park Fund in 2001 were $259,213. This is over six times more than
the original 2001 budget allocation. We did not find any major variances in the other funds and
no budget transfers indicating the source of the additional $225,613 in the Park Fund. We noted
that in 2001, the Town constructed a football field at Lasser Park through the Park Fund.
However, we did not locate a funding source for the football field. Given the lack of adequate
documentation we cannot determine conclusively how the grant moneys were expended.
However, it appears that the $250,000 grant money may have been transferred to the Park Fund
and subsequently used for the football field.

In conclusion, there is no evidence that Town officials used the $250,000 State grant for its
stated purpose of assisting with the Town’s flood prevention initiatives. Due to the extremely
poor recordkeeping, we could not conclusively determine how the $250,000 was spent.

Recommendations

   1. The Board should ensure that the Supervisor implement and enforce an effective system
      of internal controls to ensure that all transactions are properly recorded and adequately
      documented. In addition, all but necessary bank accounts should be eliminated.

   2. The Town should set $250,000 aside to be used as originally intended by the State grant
      or refund the grant funds to the State.

Corrective Action

The Town Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the
General Municipal Law, the Town Board should prepare a plan of action that addresses the
recommendations in this report and forward the plan to our office within 90 days. We encourage
the Town Board to make this plan available for public review in the Town Clerk’s office. See the
attached document for additional information on filing a corrective action plan. Our Office is
available to assist you upon request. If you have any questions about this report, please contact
our Albany Regional Office at (518) 438-0093.

                                             Sincerely,




                                             Steven J. Hancox
                                             Assistant Comptroller




                                                3
                                        APPENDIX A

                          RESPONSE FROM TOWN OFFICIALS

The Town officials’ response to this audit can be found on the following pages.




                                               4