OFFICE OF THE NEW YORK STATE COMPTROLLER
D IVISION OF LOCAL GOVERNMENT SERVICES
& ECONOMIC DEVELOPMENT
Town of Catlin
Town Clerk’s Cash Receipts
Report of Examination
January 1, 2002 - May 15, 2006
A LAN G. H EVESI
Table of Contents
AUTHORITY LETTER 3
EXECUTIVE SUMMARY 5
Scope and Methodology 8
Comments of Local Ofﬁcials and Corrective Action 8
TOWN CLERK IRREGULARITIES 9
Cash Shortage 9
Manipulation of Real Property Tax Records 11
INTERNAL CONTROLS WEAKNESSES 13
Segregation of Duties 13
Board Oversight 14
Late Remittances 15
Collection Procedures 16
Inventory of Duplicate Receipts 17
APPENDIX A Response From Local Ofﬁcials 19
APPENDIX B OSC Comments to the Clerk’s Response 34
APPENDIX C Audit Methodology and Standards 37
APPENDIX D How to Obtain Additional Copies of the Report 39
APPENDIX E Local Regional Ofﬁce Listing 40
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 11
State of New York
Ofﬁce of the State Comptroller
Division of Local Government Services
and Economic Development
Dear Town Ofﬁcials:
One of the Ofﬁce of the State Comptroller’s top priorities 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. Further objectives 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 governments’ assets.
The reports issued by this Ofﬁce are an important component in accomplishing these objectives. These
reports are expected to be a resource and are designed to identify current and emerging ﬁscally related
problems and provide recommendations for improvement. The following is our report on the Town of
Catlin — Town Clerk’s Cash Receipts and Disbursements.
This audit was conducted pursuant to the State Comptroller’s authority as set forth in Article V,
Section 1 of the State Constitution and Article 3 of the General Municipal Law. The report contains
opportunities for improvement for consideration by the Town Board.
If we can be of assistance to you or if you have any questions concerning this report, please feel free
to contact the local regional ofﬁce for your county listed at the back of this report.
Ofﬁce of the State Comptroller
Division of Local Government Services
and Economic Development
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 33
State of New York
Ofﬁce of the State Comptroller
The Town of Catlin (Town) is a small rural town located in Chemung County (County), with a
population of 2,650 according to the 2000 Federal census. The Town Clerk (Clerk) is an elected
position whose responsibilities include issuing and collecting conservation, marriage and dog licenses
and related fees; and, collecting water rents, zoning and building permit fees. Generally, fees collected
by the Clerk are property of the State, County or the Town and must be remitted promptly to the
appropriate entity. The Clerk also must prepare a monthly report to the Town Supervisor (Supervisor)
summarizing the fees collected each month and to whom they were paid. These reports indicated that
during the 2002, 2003, 2004 and 2005 the Clerk collected approximately $13,600, $11,800, $11,400
and $11,800, respectively. In addition to fees and water rents, the Clerk is responsible for collecting
Town and County real property taxes from January 1 to March 31 each year. In 2004 and 2005, the
Town and County tax warrant was approximately $1,601,292 and $1,651,491, respectively. The Clerk
is also required to collect interest and penalties on real property taxes.
The Town Board (Board) is responsible for the general management and oversight of all Town
functions. In fulﬁlling this responsibility, the Board made several requests for the Clerk’s records
in 2005. Eventually, the Clerk acquiesced and presented some of her records to the Board for audit.
In March of 2005, the Supervisor contacted our ofﬁce at the direction of the Board. He requested
an audit of the records of the Clerk, Tina Scriven. The Supervisor indicated in a letter to our ofﬁce
that during the annual audit of the Clerk’s 2004 records, “shortcomings were noted in her ﬁnancial
recordkeeping.” The Supervisor further informed us that the Clerk “Tina Scriven has admitted that she
is over $500 short in meeting her ﬁnancial obligations for the month of February 2005.”
Our audit disclosed that as of May 15, 2006 the Clerk’s known liabilities exceeded available cash
assets by almost $3,000.
Scope and Objectives
The objective of this audit was to determine if the Clerk properly accounted for all moneys received
and disbursed in her ofﬁcial capacity. Our audit addressed the following questions for the period
January 1, 2002 to May 15, 2006.
• Are internal controls for the Clerk’s ofﬁce operating effectively, helping to ensure that the
Clerk recorded, supported, deposited, disbursed and reported fees and tax receipts in a timely
and accurate manner?
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 55
• Did the Board provide adequate oversight of the ﬁnancial activity in the Clerk’s ofﬁce?
As of May 15, 2006, Clerk Tina Scriven was short $2,889 to satisfy known liabilities. Included in this
amount is $2,500 of prior years (2002-05) and $389 in current year fees. We identiﬁed these shortages
from duplicate receipts and other records on ﬁle in the Clerk’s ofﬁce.
We also documented three instances during the 2004 tax collection period where taxpayers paid their
bills late and should have been charged penalties, but the Clerk knowingly entered false information
regarding collection dates in her ofﬁcial tax collection records in order to forgive taxpayer late penalties.
This activity cost the Town $214 in lost revenue.
We believe that the lack of an adequate segregation of duties and a lack of Board oversight contributed
to the cash shortage being undetected for several years. We also noted a pattern of late remittance to
the Supervisor and the inability to make payments to the Supervisor when they were due because of
insufﬁcient funds in the Clerk’s bank account. The Clerk also failed to perform monthly reconciliations,
another important control procedure used to detect errors and irregularities. Collection procedures
were also weak because separate cash drawers were not used and the Clerk failed to issue receipts to
other Town ofﬁcers who transferred money to her. Finally, an inventory of duplicate receipts was not
maintained by someone independent of the collection process.
Comments of Local Ofﬁcials
The results of our audit and recommendations have been discussed with Town ofﬁcials and their
comments, which appear in Appendix A, have been considered in preparing this report. We received
written responses from both the Clerk and the Supervisor. The Supervisor indicated that a majority of
the Board agrees with our ﬁndings and that corrective action has been or will be taken on all of our
recommendations. The Clerk raised many issues with our audit and indicated that our ﬁndings are
incomplete and in some respects inaccurate and/or misleading. Our responses to the issues raised by
the Clerk appear in Appendix B.
6 OFFICE OF THE NEW YORK STATE COMPTROLLER
Background The Town of Catlin (Town) is a small rural town located in Chemung
County (County), with a population of 2,650 according to the 2000
Federal census. The Town Clerk (Clerk) is an elected position. The
Clerk’s responsibilities include issuing and collecting conservation,
marriage and dog licenses and related fees; and, collecting water rents,
zoning and building permit fees. Generally, fees collected by the Clerk
are property of the State, County or the Town and must be remitted
promptly to the appropriate entity. The Clerk also must prepare a
monthly report to the Town Supervisor (Supervisor) summarizing
the fees collected each month and to whom they were paid. These
reports indicated that during the 2002, 2003, 2004 and 2005 years
the Clerk collected approximately $13,600, $11,800, $11,400 and
In addition to fees and water rents, the Clerk is responsible for
collecting Town and County real property taxes from January 1 to
March 31 each year. In 2004 and 2005, the Town and County tax
warrant was approximately $1,601,292 and $1,651,491, respectively.
The Clerk is required to periodically remit tax collections ﬁrst to the
Supervisor to satisfy the Town’s tax warrant and then to the County.
The Clerk is also required to remit interest and penalties collected
in connection with real property taxes to the Supervisor during the
month following collection. At the end of the collection period, the
Clerk prepares a reconciliation of the tax warrant to account for all
collections, adjustments, and unpaid taxes. The Clerk then must return
unpaid taxes to the County Treasurer for collection and enforcement
The Town Board (Board) is responsible for the general management
and oversight of all Town functions. In fulﬁlling this responsibility,
the Board must conduct an annual audit of the books and records
of all ofﬁcers or employees who receive or disburse Town moneys.
Such ofﬁcers and employees must produce all pertinent books and
records for audit. Accordingly, the Board made several requests for
the Clerk’s records in 2005. Eventually, the Clerk acquiesced and
presented some of her records to the Board for audit. In March of
2005, the Supervisor contacted our ofﬁce at the direction of the Board.
He requested an audit of the records of the Clerk, Tina Scriven. The
Supervisor indicated in a letter to our ofﬁce that during the annual
audit of the Clerk’s 2004 records, “shortcomings were noted in her
ﬁnancial recordkeeping.” The Supervisor further informed us that
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 77
the Clerk “Tina Scriven has admitted that she is over $500 short in
meeting her ﬁnancial obligations for the month of February 2005.”
Objectives The objective of this audit was to determine if the Clerk properly
accounted for all moneys received and disbursed in her ofﬁcial
capacity. Our audit addressed the following questions.
• Are internal controls for the Clerk’s ofﬁce operating effectively,
helping to ensure that the Clerk recorded, supported, deposited,
disbursed and reported fees and tax receipts in a timely and
• Did the Board provide adequate oversight of the ﬁnancial
activity in the Clerk’s ofﬁce?
Scope and During this audit, we examined the cash receipt and disbursement
Methodology functions and internal controls of the Clerk for the period January 1,
2002 through May 15, 2006.
We conducted our audit in accordance with Generally Accepted
Government Auditing Standards. More information on such standards
and the methodology used in performing this audit are included in
Appendix C of this report.
Comments of The results of our audit and recommendations have been discussed
Local Ofﬁcials and with Town ofﬁcials and their comments, which appear in Appendix
Corrective Action A, have been considered in preparing this report. We received written
responses from both the Clerk and the Supervisor. The Supervisor
indicated that a majority of the Board agrees with our ﬁndings and that
corrective action has or will be taken on all of our recommendations.
The Clerk raised many issues with our audit and indicated that our
ﬁndings are incomplete and in some respects inaccurate and/or
misleading. Our responses to the issues raised by the Clerk appear in
The Board has the responsibility to initiate corrective action. Pursuant
to Section 35 of the General Municipal Law, the Board should prepare
a plan of action that addresses the recommendations in this report
and forward the plan to our ofﬁce within 90 days. For guidance in
preparing your plan of action, you may refer to applicable sections in
the publication issued by the Ofﬁce of the State Comptroller entitled
Local Government Management Guide. We encourage the Board to
make this plan available for public review in the Clerk’s ofﬁce.
8 OFFICE OF THE NEW YORK STATE COMPTROLLER
Town Clerk Irregularities
Town ofﬁcials act as public servants and are charged with carrying out
the functions of their ofﬁces in a forthright and honest manner. The
duties of the Clerk include receiving, depositing, accounting for and
reporting all Clerk fees, water rents, real property taxes and interest
and penalties in an accurate and timely manner. Discharging these
duties in an honest and forthright manner includes demonstrating by
example compliance with basic tenets of internal control regarding
the safeguarding of public moneys and providing for taxpayer equity
in the collection of tax receipts and penalties.
Our examination of the Clerk’s cash receipt and cash disbursement
transactions disclosed a pattern of irregularities in several areas
involving cash receipts. These irregularities included insufﬁcient
cash assets to meet known liabilities; the substitution of unrecorded
customer checks for other fees received; and the manipulation of tax
records regarding interest and penalties.
Cash Shortage In order to determine the sufﬁciency of Clerk Tina Scriven’s cash
assets to satisfy known liabilities as of May 15, 2006, we prepared the
following accountability and determined that the Clerk’s liabilities
exceeded available cash by $2,889 as of this date:
Known Liabilities at May 15, 2006: Amount
March 2006 Clerk Fees Due to Supervisor $529.12
April 2006 Clerk Fees Due to Supervisor 218.46
May 2006 Collections 187.60
Prior Years’ (2002-05) Clerk Fees Due to Supervisor and State Department of Health 2,500.47
Petty Cash 150.00
Total Known Liabilities 3,585.65
Available Cash Assets at May 15, 2006 (on hand and on deposit) 696.98
Cash Shortage at May 15, 2006 $2,888.67
Of the $2,500.47 in prior years’ Clerk fees, $2,432.97 represents
fees, primarily involving building permits, zoning fees and driveway
application permits, collected by the Clerk’s ofﬁce but not recorded
as received in the cash receipts book, and $67.50 represents marriage
license fees that were recorded in the cash receipts book. Evidence of
the collection of these fees was found primarily in duplicate receipts
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 99
on ﬁle in the Clerk’s ofﬁce. We found no evidence to indicate that these
fees had been remitted by the Clerk to the Supervisor or to the New
York State Department of Health. Duplicate receipts indicated that
31 of prior years’ Clerk fees (ranging in amounts from $4 to $149) for
a total of $840 were received in the form of cash and an additional 19
items totaling $1,160 were received by check. None of these cash and
cash items were recorded as received in the cash receipts book. Other
forms of evidence were used to identify 16 other receipts totaling
$500. We believe the checks not recorded are indicative of a pattern
of substitution, whereby the checks are substituted for cash received,
but not remitted to the Supervisor.
For example, we documented ﬁve instances where fees totaling
$523.66 collected in the form of checks (again as evidenced by
duplicate receipts), were not recorded in the Clerk’s cash receipts
book, and were not remitted to the Supervisor. An analysis of the
composition of bank deposits made by the Clerk showed that these
checks were, however, deposited by the Clerk into her ofﬁcial bank
account. Since the totals of the cash receipts book, monthly ﬁnancial
reports and the Clerk’s net deposits were in substantial agreement
during this period, we concluded that these ﬁve checks had been
substituted for other cash fees received during the same time period,
likely to cover up the theft of the cash. Given the condition of the
records, it is possible that there were additional substitutions that were
not detected by our audit. The detail of these unrecorded checks,
which were substituted for other fees collected by the Clerk’s Ofﬁce,
was obtained from bank records:
Payer’s Type of Fee
Check Check Deposit Amount of Collected But
Number Date Date Check Not Recorded
1234 November 7, 2002 November 26, 2002 $150.00 Site Planning Fee
596 November 10, 2003 November 13, 2003 $74.02 Building Permit Fee
1208 November 24, 2003 November 25, 2003 $63.00 Building Permit Fee
3107 November 24, 2003 November 25, 2003 $134.89 Building Permit Fee
560 September 27, 2004 September 28, 2004 $101.75 Building Permit Fee
Grand Total $523.66
In addition, we noted that collections made from March through
May 15th, 2006 had not been paid to the Supervisor as of May 15,
2006. The Clerk was unable to make these payments, totaling $747,
because her net bank balance of $545 was insufﬁcient to cover these
10 OFFICE OF THE NEW YORK STATE COMPTROLLER
It is also noteworthy to mention that, prior to April 26, 2005 (the date
we began our work on the Clerk’s accountability), we were unable
to trace speciﬁc cash receipt entries to bank deposits. However,
after this date a clear audit trail between recorded receipts and bank
deposits was found.
The Clerk’s cash shortage was not detected sooner because of weak
internal controls over the segregation of duties and the failure to
perform periodic reconciliations. See further discussion on these
controls and others in our section entitled “Weaknesses in Internal
Manipulation of Real The Clerk is responsible for all moneys that the tax warrant directs
Property Tax Records her to collect. The Clerk is also required to keep an accurate account
of all tax collections including interest and penalties. The Clerk does
not have the authority to change the terms of the collection period, the
interest free period, nor enter ﬁctitious or false dates in her records or
accept partial payments.
We documented three instances during the 2004 tax collection period
where taxpayers paid their bills late and should have paid late penalties,
but the clerk did not record penalties as being paid. If these taxpayers
paid late penalties, the Town should have received an additional $214
in interest and penalties. The Clerk informed us that she accepted
one of the three late payments from a taxpayer in March 2004 and
she instructed the taxpayer to “back date” the check to January 31,
the end of interest free period, to avoid paying the $155 late charge.
The Collector then recorded the penalty free payment in her ofﬁcial
records as received on January 31, 2004.
We also documented that the Clerk accepted a $330 tax payment
paid on March 11, 2004 without charging late penalties. The detailed
receipt for the tax payment was a tax reminder notice sent out by the
Clerk after January 31, 2004, the end of the interest free period. The
reminder notice was stamped paid January 31, 2004 by the Clerk, a
date the Clerk admits the ofﬁce was not open and did not accept tax
payments. The tax receipt was deposited in the Clerk’s tax collection
bank account in March 2004.
Finally, we documented that the Clerk accepted a partial payment of
$2,543 from a mortgage company in January of 2004. The remainder
of the payment ($2,595) was accepted and received after the interest
free period (without required interest and penalties) and deposited on
March 1, 2004.
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 11
Recommendations 1. The Board should contact law enforcement ofﬁcials to initiate an
investigation into the missing money.
2. The Clerk should reimburse the Town for the $2,888.67 of missing
money and for the $214 of interest and penalties owed to the Town
that she did not collect.
12 OFFICE OF THE NEW YORK STATE COMPTROLLER
Internal Controls Weaknesses
A good system of internal controls consists of policies, practices and
procedures that allow a municipality to provide reasonable assurance
that its resources are being properly accounted for and safeguarded.
A major component of such a system is a requirement that no one
individual be able to control substantially all phases of a transaction.
Another major component of good internal control is management’s
oversight and monitoring of such controls to ensure that they are
operating effectively. A good system of internal controls provides
assurances that all cash receipts are properly handled, reported
accurately and disbursed in a timely manner. To provide assurances
that cash receipts are handled, reported and disbursed in such a
manner, the Board and the Clerk should ensure that sound policies and
procedures are implemented regarding segregation of duties; timely
remittances to the Supervisor; reconciliations; collection procedures;
and the use and inventory of duplicate receipts.
The Clerk did not have adequate policies and procedures to ensure that
all cash receipts were supported, recorded and deposited, disbursed
and reported in an accurate and timely manner. Speciﬁcally, there was
minimal segregation of duties within the Clerk’s ofﬁce and monthly
reconciliations of cash assets to liabilities were not performed.
Additionally, the Clerk did not provide separate cash drawers for
herself and her deputies and she did not ensure that undeposited cash
was properly safeguarded. The Clerk did not ensure that remittances
were made to the Supervisor in a timely manner; duplicate receipt
books were issued in sequential order; and that an inventory of receipt
books was maintained; As a result of these control weaknesses, a cash
shortage of $2,889, primarily involving building permits, zoning fees
and driveway application permits, occurred and was not detected in
a timely manner.
Segregation of Duties The Clerk is responsible for properly accounting for all moneys
received in her ofﬁcial capacity. The Clerk and the Board should
establish an effective system of internal controls to provide reasonable,
but not absolute, assurance that resources are safeguarded against loss
from unauthorized use or disposition. Such a system would provide
that the duties of the Clerk’s ofﬁce be segregated among various
employees. Although optimal segregation of duties may not always
be practical, we believe, at a minimum, the duties of handling cash
(custody) and recordkeeping should be segregated. When sufﬁcient
segregation of duties is not possible, it is imperative that the Board
provide sufﬁcient oversight for the Clerk’s operations.
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 13
There was little or no segregation of duties within the Clerk’s ofﬁce.
During the period examined, the Clerk was responsible for collecting
cash receipts directly from customers and receiving collections made
by other parties; preparing all bank deposit slips and making all bank
deposits; posting all collections to computerized accounting records;
and, preparing monthly reports of collections and disbursements. No
other employees were responsible for recording entries in the cash
receipts book, preparing bank deposit slips and making bank deposits.
The Clerk also prepared and signed disbursement checks from her
ofﬁcial bank account and received monthly bank account statements.
This concentration of cash custody and recordkeeping duties in a
single individual gave the Clerk substantial control over all phases
of cash transactions. When performed by the same individual, this
concentration of custody and recordkeeping duties represents an
inadequate segregation of duties. The Board provided no oversight to
help mitigate this situation.
The lack of segregation of duties and corresponding oversight by
the Board are the primary control weakness that caused the $2,889
cash shortage to be undetected for such an extended length of time.
In addition, we found no indication that the Board had adequately
monitored the Clerk’s ﬁnancial activities and tax collection functions
on an ongoing basis as a compensating control to the lack of segregation
of duties in her ofﬁce.
Board Oversight The Board is responsible for establishing and monitoring internal
controls over departmental operations. The Board needs to ensure
that adequate policies and procedures are in place to protect Town
assets. The Board also needs to provide periodic oversight so that
it can promptly identify when established controls and ﬁnancial
procedures are not being conducted as they should be.
The Board performed a statutorily required annual audit of the
Clerk’s records for 2002, 2003 and 2004. The Board became aware
of accountability problems in the Clerk’s ofﬁce as a result of their
2005 audit of the Clerk’s 2004 records. After being contacted by the
Board, we documented a shortage of $2,889 in the Clerk’s ofﬁce as of
May 15, 2006. This shortage dates back to 2002. In a prior report of
examination (2002M-79), we also documented shortages in the Town
of Catlin justices’ bank accounts of $1,995 and $1,449, respectively.
Other than the annual audit conducted by the Board, we found no
other examples of Board oversight over departmental ﬁnancial
operations. Two areas of signiﬁcance in all of these shortages were
the lack of an adequate segregation of duties and deﬁciencies in
14 OFFICE OF THE NEW YORK STATE COMPTROLLER
recordkeeping. Because of these deﬁciencies, the Board should have
had a heightened awareness that errors and irregularities (fraud)
could occur both in their annual audit and in their routine monitoring
of departmental operations. As discussed more thoroughly in our
preceding ﬁnding, the Board has not established written policies and
procedures to provide for the segregation of key ﬁnancial duties in
the Clerk’s ofﬁce nor the establishment of compensating controls to
mitigate the lack of an adequate segregation of duties. Due to the lack
of segregation of duties in the Clerk’s ofﬁce, the Board should have
provided monitoring of her ﬁnancial operations throughout the ﬁscal
When the Board fails to provide written policies and procedures
to protect Town assets and fails to monitor departmental ﬁnancial
operations throughout the ﬁscal year, there is little to prevent key
departmental employees from misusing Town assets. Board oversight
can act as a compensating control when an adequate segregation of
duties is not practical. As part of its oversight activities, the Board
also needs to promptly investigate indicators of possible wrongdoing
such as late remittances or untimely deposits.
Late Remittances The Clerk is responsible for all moneys received in her ofﬁcial
capacity and is required to turn over Clerk fees owing to the
Supervisor and interest and penalties on real property taxes no later
than the 15th of the month following the receipt thereof. Any pattern
of late remittances should be investigated by the Board as a possible
indication of accounting errors or irregularities (fraud) occurring and
remaining undetected. Good internal control procedures require that
fees be remitted in a timely and consistent manner.
We reviewed 52 monthly Clerk fee remittances to the Supervisor for
timeliness. We noted 18 instances in which the payment was made
after the time permitted. For example, the payments due to the
Supervisor in December 2005 and January, February and March 2006
ranged between 40 to 50 days late.
We also reviewed the timeliness of remittances of interest and penalties
collected on real property taxes. We found that during 2004 and
2005, the Clerk received $3,013 and $3,658 in interest and penalties,
respectively. However, instead of remitting the amounts so received
by the 15th day of the month following receipt (i.e., by March 15
and April 15), the Clerk made lump-sum remittances of the amounts
indicated above in November 2004 and October 2005, respectively.
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 15
The untimely remittance of these moneys increased the risk that errors
and/or irregularities were occurring and were not being detected. In
the case of the late remittance of the clerk fees, it may also have been
an indication that available cash in the bank was not sufﬁcient to
satisfy amounts due to the Supervisor.
Reconciliations Another basic internal control used to ensure that all funds are
properly recorded and accounted for is the periodic reconciliation of
cash resources to outstanding liabilities. This procedure can uncover
recordkeeping errors, banking errors and possible irregularities
that should be promptly investigated and resolved. The Clerk is
responsible for performing monthly reconciliations to ensure the
accuracy and the reliability of her recorded transactions.
The Clerk did not perform monthly reconciliations of cash assets to
known liabilities. Prior to April 2005, the Clerk did not maintain a
complete and accurate record of her bank balance. Although the Clerk
recorded her cash receipts in a computerized accounting system, she
did not keep a cash control account in the system nor did she keep a
running balance in her check book. One result was that we identiﬁed
three instances in 2002 and 2003 where the Clerk’s bank account was
Failure to reconcile cash resources to liabilities deprives the Board
of a valuable tool necessary to ensure that all Clerk cash assets are
accounted for. As a result, irregularities can and did occur that were
undetected and uncorrected. After we provided technical assistance
in April of 2005, the Clerk began maintaining a cash control account
in the form of a running check book balance. She also now attempts
to reconcile known liabilities to available cash assets on a monthly
Collection Procedures The Clerk is responsible for all moneys received in her ofﬁcial
capacity and should provide for the protection of those cash assets.
The Clerk should provide separate cash drawers for each person who
collects cash in order to ﬁx responsibility for speciﬁc cash collections.
The Clerk should also issue a receipt to acknowledge the transfer of
collections between different Town departments.
The Town’s Code Enforcement Ofﬁcer was appointed Deputy Clerk
for the purpose of collecting building permits and zoning fees. The
Code Enforcement Ofﬁcer and her Deputy issue permits, collect fees
and prepare receipts for their collections. A single cash drawer is
used by the Code Enforcement Ofﬁcer and her deputy. From January
2002 to August 2005, the Code Enforcement Ofﬁcer was directed by
the Clerk to place all code enforcement collections in the Clerk’s cash
16 OFFICE OF THE NEW YORK STATE COMPTROLLER
drawer, or after hours, to place them on the Clerk’s desk. Both the
Clerk and the Code Enforcement Ofﬁcer conﬁrmed that this was the
procedure used to transfer collections between the two ofﬁcers. During
this period, the Clerk did not issue a duplicate receipt acknowledging
the receipt of moneys from the Code Enforcement Ofﬁcer.
However, beginning in September 2005, the Code Enforcement
Ofﬁcer was further directed by the Clerk to discontinue the practice
of placing her collections and those of her Deputy in the Clerk’s cash
drawer. Instead, the Code Enforcement Ofﬁcer keeps all moneys
collected by her ofﬁce in a locked desk drawer until it can be directly
transferred to the Clerk, at which time she issues a receipt to the Code
Enforcement Ofﬁcer for the amount transferred to her.
In addition to the Code Enforcement Ofﬁcer, the Clerk has a part-time
Deputy who works in the Clerk’s Ofﬁce. This Deputy Clerk collects
Clerk fees and was also directed by the Clerk to place her moneys in
the Clerk’s common cash drawer. The Clerk’s Deputy was also not
provided with her own cash drawer.
The failure to provide adequate protection for undeposited cash and
checks increases the risk that irregularities such as fraud involving
collections can occur. The failure to provide separate cash drawers for
each person who collects fees and issues receipts prevents establishing
individual responsibility and accountability for fees collected.
Inventory of Duplicate The Clerk and Board are responsible for establishing procedures
Receipts concerning the use of serially, press-numbered duplicate receipts. In
order for the issuance of receipts to be a meaningful and strong control,
receipt books must be inventoried, safeguarded and accounted for by
someone independent of the collection process. An effective system
of internal controls will allow the Board to review duplicate receipts
and verify that the Clerk is depositing all recorded fees into her
ofﬁcial bank account. In addition, each Town ofﬁcer and employee
who collects fees should be held accountable for all unused receipts
and receipt books issued to him/her.
During our audit we attempted to inventory the duplicate receipt
books used by the Clerk and her Deputies and found that controls
over the possession of receipt books were lacking. We found that
although each press-numbered duplicate receipt book had an intact
sequence, the books themselves were not used in sequence. We were
informed by the Clerk that no inventory record of duplicate receipt
books issued was maintained.
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 17
The maintenance of an inventory record of duplicate receipt books
by someone independent of the collection process would improve the
accountability and control over cash collections.
Recommendations 3. The Clerk and the Board should implement policies and procedures
to ensure that an adequate segregation of duties exists between
cash custody and recordkeeping duties or that compensating
controls are implemented.
4. The Board should monitor the Clerk’s and other departmental
ﬁnancial operations periodically during the ﬁscal year. In addition,
when performing their annual audit of the Town ofﬁcers who
receive cash and checks, the Board should be more cognizant
of risks associated with a lack of segregation of duties and
5. The Board should monitor the timeliness of remittances from
the Clerk and determine why monthly fees are not remitted by
the required due date. The Board should ensure that controls are
established in the Clerk’s Ofﬁce to provide reasonable assurance
that all fees collected by that ofﬁce are recorded and reported to
6. The Clerk should perform monthly reconciliations of available
cash to known liabilities and promptly resolve any discrepancies
noted. As part of their oversight activities, the Board should
require the Clerk to submit her reconciliation with her monthly
report for their review.
7. The Clerk should provide separate cash drawers for all individuals
who collect fees and should issue a duplicate receipt when
collections are transferred to her by other Town ofﬁcers.
8. The Clerk and the Board should establish procedures to ensure that
duplicate press-numbered receipts are inventoried by someone
independent of the collection process and that a formal record
is maintained of receipt books issued, to whom issued and when
18 OFFICE OF THE NEW YORK STATE COMPTROLLER
RESPONSE FROM LOCAL OFFICIALS
The local ofﬁcials’ response to this audit can be found on the following pages.
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 19
OSC COMMENTS TO THE CLERK’S RESPONSE
In response to comments made by the Clerk, we provide the following information.
The Clerk stated that “The draft report was provided to me on August 30, 2006 with a request for
comment no later than September 20, 2006. Given the limited time available for response, my comments
are similarly limited and incomplete.” We mailed the draft report to the Clerk on August 21, 2006.
It is our policy to require a written response to the draft within 30 days of the date it is mailed. More
importantly, on two occasions during our audit, once in November 2005 and again in June 2006, we
presented our comparisons of known liabilities with available cash assets to the Clerk and we asked
her for an explanation of the cash shortage. In both instances, the Clerk provided no explanation to us.
Furthermore, on August 30, 2006, when we discussed the draft report with the Clerk and other Town
ofﬁcials, we informed the Clerk that if she has any explanations for the cash shortage, she should
provide that information to us by the following Tuesday September 5. In light of the three requests we
made for explanations, we believe the Clerk had more than enough time to respond.
Our audit was not based on conjecture and extrapolation. We have complied with all GAGAS
requirements, including the requirement for obtaining sufﬁcient competent and relevant evidence
necessary to provide a reasonable basis for the ﬁndings and conclusions in our report. As such, we
believe the accumulated shortage contained in this report is accurate. As stated in Note 1, the Clerk has
had ample opportunity to provide us with explanations of the cash shortage, and has not.
The delay in access to the Clerk’s records that we mention in the Introduction was stated to us by the
Supervisor. This statement was repeated at our exit conference held on August 30, 2006. Neither the
Clerk, nor the other four Board members challenged the statement made by the Supervisor at the exit
conference that the Board asked for the Clerk’s records more than once.
We cannot speak to the depth or quality of the audits by the Board. We do note that the Board does not
comprise experienced auditors.
Our report noted internal control weaknesses related to cash collection procedures, including the Clerk’s
failure to provide separate cash drawers for each person who collected fees. We also stated that our
examination of the Clerk’s cash receipt and disbursement records disclosed a pattern of irregularities
in several areas involving cash receipts, as outlined in the report.
34 OFFICE OF THE NEW YORK STATE COMPTROLLER
Our report acknowledges corrective actions implemented by the Clerk.
In the Introduction of our report, we say the Supervisor informed us that the Clerk admitted she is
over $500 short. We based this statement on a March 9, 2005 letter prepared by the Supervisor at the
direction of the Board.
Again, as stated in Note 1, we gave the Clerk two opportunities during our audit to review and provide
an explanation for the cash shortage. She chose not to take advantage of those opportunities. When she
ﬁnally responded to our draft report, we followed up on the statements she made in relation to marriage
license fees. We found that the amount of prior years’ (2002-05) Clerk fees due the Supervisor referred
to in the draft report ($2,514.22) was overstated by $13.75. Accordingly, we have amended our report
to reduce the amount of prior years’ fees and the cash shortage by $13.75. We also amended our report
to reﬂect the fact that a portion of the prior years’ fees ($67.50) represents the State’s share of marriage
license fees and are due to the State Department of Health. We found no evidence in the Clerk’s
records to indicate that she remitted the $67.50 to the State, nor did the Clerk provide us with written
documentation to support her statement that the marriage license fees were paid to the State.
In this paragraph, it appears that the Clerk is referring to prior years’ (2002-05) Clerk fees. Our analysis
of Clerk liabilities for prior years’ fees did not include any liabilities for dog or conservation license
fees. Such fees were, however, included in amounts due the Supervisor for the period from March 1
through May 15, 2006.
We concluded that ﬁve checks had been substituted for other cash fees received, and that given the
condition of the records, it is possible there were additional substitutions not detected by our audit. We
stand by our conclusion, and we believe our report adequately explains the transactions in question, as
well as the basis for our conclusion.
As indicated in Note 8, we amended our report to reduce the amount of the cash shortage by $13.75.
Accordingly, we have concluded that the cash shortage is $2,889.
The Clerk is personally responsible for moneys received on behalf of her ofﬁce. We did not recommend,
nor do we concur with, the Board’s prior action.
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 35
The Clerk is responsible for the operation of her ofﬁce. In spite of the internal control weaknesses, the
Clerk should have noted when preparing the deposit or reviewing her cash book that the transaction
was unusual and should have been investigated.
36 OFFICE OF THE NEW YORK STATE COMPTROLLER
AUDIT METHODOLOGY AND STANDARDS
We reviewed the ﬁnancial operations of the Clerk to determine if she properly accounted for all moneys
received and disbursed in her ofﬁcial capacity for the period January 1, 2002 to May 15, 2006.
In order to accomplish our objective we interviewed appropriate Town ofﬁcers and employees,
observed Clerk operations and tested selected accounting and real property tax records, reports and
transactions. We also obtained information from the Town’s bank pertaining to the composition of
We reviewed source documents and reports relating to dog licenses, marriage licenses, building permits
and zoning fees issued during our audit period. We veriﬁed that fees were recorded by tracing them
from source records to press-numbered duplicate receipts and to the cash receipts book. We veriﬁed
that fees were remitted to the proper parties by comparing amounts received on the cash receipts sheets
to the Clerk’s monthly reports and reports made to Chemung County and New York State Agencies.
We judgmentally selected eight bank deposits and compared the composition of the deposit detail
(as provided by the Town’s bank) to the detail recorded in the cash receipts book. We veriﬁed that
disbursements were supported and proper by reviewing cancelled checks, check registers, and bank
statements, and we determined whether remittances of clerk fees were made on a timely basis. We
veriﬁed that checks were accounted for. We compared known liabilities to available cash assets for the
Clerk’s bank account as of May 15, 2006.
Real Property Taxes
We reviewed records to determine if the Clerk properly collected and remitted all Town and County
real property taxes in 2004. We reviewed all 2004 real property tax bills and corresponding tax receipts
entries. We compared dates taxes were received as noted on duplicate tax receipt forms and in the
tax receipts register to deposit dates. We veriﬁed that interest and penalties on delinquent taxes were
collected properly by recalculating such charges and comparing to amounts actually recorded. We
veriﬁed that all disbursements were proper and supported by reviewing cancelled checks, check
registers and bank statements. We determined if the Clerk properly settled 2003, 2004 and 2005 taxes
with the Chemung County Treasurer by reconciling total taxes levied, collected and unpaid to tax
collector settlement sheets. We judgmentally selected 19 bank deposits made in 2004 and compared
the composition of the deposit detail (as provided by the Town’s bank) to the cash receipts book.
We conducted our audit in accordance with Generally Accepted Government Auditing Standards. Such
standards require that we plan and conduct our audit to adequately assess those municipal operations
within our audit scope. Further, those standards require that we understand the municipality’s
management controls and those laws, rules and regulations that are relevant to the municipality’s
operations included in our scope. An audit includes examining, on a test basis, evidence supporting
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 37
transactions recorded in 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 the ﬁndings, conclusions and recommendations contained in this report.
38 OFFICE OF THE NEW YORK STATE COMPTROLLER
HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT
To obtain copies of this report, write or visit our web page:
Ofﬁce of the State Comptroller
Public Information Ofﬁce
110 State Street, 15th Floor
Albany, New York 12236
DIVISION OF LOCAL GOVERNMENT SERVICES AND ECONOMIC DEVELOPMENT 39
OFFICE OF THE STATE COMPTROLLER
DIVISION OF LOCAL GOVERNMENT SERVICES
AND ECONOMIC DEVELOPMENT
Mark P. Pattison, Deputy Comptroller
Steven J. Hancox, Assistant Comptroller
John Clarkson, Assistant Comptroller
LOCAL REGIONAL OFFICE LISTING
BUFFALO REGIONAL OFFICE GLENS FALLS REGIONAL OFFICE
Robert Meller, Chief Examiner Karl Smoczynski, Chief Examiner
Ofﬁce of the State Comptroller Ofﬁce of the State Comptroller
295 Main Street, Room 1050 One Broad Street Plaza
Buffalo, New York 14203-2510 Glens Falls, New York 12801-4396
(716) 847-3647 Fax (716) 847-3643 (518) 793-0057 Fax (518) 793-5797
Email: Muni-Buffalo@osc.state.ny.us Email: Muni-GlensFalls@osc.state.ny.us
Serving: Allegany, Cattaraugus, Chautauqua, Erie, Serving: Clinton, Essex, Franklin, Fulton, Hamilton,
Genesee, Niagara, Orleans, Wyoming counties Montgomery, Rensselaer, Saratoga, Warren, Washington
ROCHESTER REGIONAL OFFICE ALBANY REGIONAL OFFICE
Edward V. Grant, Jr., Chief Examiner Christopher J. Ellis, Chief Examiner
Ofﬁce of the State Comptroller Ofﬁce of the State Comptroller
The Powers Building 22 Computer Drive West
16 West Main Street – Suite 522 Albany, New York 12205-1695
Rochester, New York 14614-1608 (518) 438-0093 Fax (518) 438-0367
(585) 454-2460 Fax (585) 454-3545 Email: Muni-Albany@osc.state.ny.us
Serving: Albany, Columbia, Dutchess, Greene, Orange,
Serving: Cayuga, Chemung, Livingston, Monroe, Putnam, Rockland, Schenectady, Ulster, Westchester
Ontario, Schuyler, Seneca, Steuben, Wayne, Yates counties
SYRACUSE REGIONAL OFFICE HAUPPAUGE REGIONAL OFFICE
Eugene A. Camp, Chief Examiner Richard J. Rennard, Chief Examiner
Ofﬁce of the State Comptroller Ofﬁce of the State Comptroller
State Ofﬁce Building, Room 409 NYS Ofﬁce Building, Room 3A10
333 E. Washington Street Veterans Memorial Highway
Syracuse, New York 13202-1428 Hauppauge, New York 11788-5533
(315) 428-4192 Fax (315) 426-2119 (631) 952-6534 Fax (631) 952-6530
Email: Muni-Syracuse@osc.state.ny.us Email: Muni-Hauppauge@osc.state.ny.us
Serving: Herkimer, Jefferson, Lewis, Madison, Serving: Nassau, Suffolk counties
Oneida, Onondaga, Oswego, St. Lawrence counties
BINGHAMTON REGIONAL OFFICE
Patrick Carbone, Chief Examiner
Ofﬁce of the State Comptroller
State Ofﬁce Building, Room 1702
44 Hawley Street
Binghamton, New York 13901-4417
(607) 721-8306 Fax (607) 721-8313
Serving: Broome, Chenango, Cortland, Delaware,
Otsego, Schoharie, Sullivan, Tioga, Tompkins
40 OFFICE OF THE NEW YORK STATE COMPTROLLER