Audit: Bookkeeping mistakes were made, now develop plan

Briana O'Hara

The Leader-Herald

Jul 25, 2018

As a result of an audit by the State Comptroller’s Office that found the former town supervisor “did not maintain, or require his bookkeeper to maintain, complete, accurate and up-to-date accounting records and reports,” Supervisor Sheila Perry was required to develop a remediation plan for the town.

According to documentation provided by Perry, an audit was performed by the comptroller’s office to examine the town’s bookkeeping methods. The period the audit covered was from Jan. 1, 2015 to Aug. 31, 2017 and was to determine whether the former town supervisor Tom Christopher and former town bookkeeper Lita Hillier were accurately maintaining timely and complete accounting records and reports to allow the town board to properly manage the town’s finances.

Perry said auditors from the comptroller’s office were in the town from August 2017 to November 2017.

“The reason they were here is the question they were asking — is the audit objective to determine whether the supervisor maintained timely complete and accurate accounting records and reports,” Perry said. “The key finding that the rest of this backs up is that he did not maintain.”

An example of how the supervisor and bookkeeper allegedly did not maintain timely and accurate accounting records is and documentation states, “The bookkeeper did not record all transfers between bank accounts, interfund transfers and interfund advances made in 2015 and 2016 in a timely manner. Specifically, the bookkeeper did not record nine transfers and advances between town bank accounts and funds totaling $292,500 in a timely manner.”

According to the audit’s findings, two advances totaling $35,000 made from the town-wide general fund to the town-outside-village highway fund in July 2015 to pay expenditures while awaiting the second quarter sales tax revenues were not recorded until July 2017 when the accounting consultant adjusted and corrected the records.

That resulted in the town-wide general funds cash balance to be “overstated” while the second fund balance was “understated.”

Another example highlighted in the report was a $40,000 transfer from the town-outside-village highway savings account to the town-outside-village highway checking account on Feb. 29, 2016 that was not recorded in the accounting records when the transfers happened.

Following the audit, the comptroller’s office recommended that Perry should periodically review the bookkeeper’s work; ensure monthly bank reconciliation are prepared and the reconciled bank balances agree with the related general ledger cash balances; provide accurate monthly financial reports to the board that include balance sheet account balances and detailed year-to-date budget-to-actual comparisons of revenues and expenditures for each fund; ensure the bookkeeper is provided with adequate training in preparing and maintaining adequate accounting records; ensure the town’s annual Update Document is filed with OSC within the required time limits and develop a plan for updating and maintaining the accounting records and filing AUDs in a timely manner.

According to Perry’s plan for updating and maintaining the accounting records and to file the AUDs in a timely manner, Perry, along with the Confidential Secretary to the Supervisor Marilyn Hollenback and bookkeeper Theresa Butevich, were moved into one secure office in which each knows within hours what has transpired with revenues, expenses, transfers and items that need further research or approval.

This plan also includes and states, “Bruce VanGenderan, [Certified Public Accountant] was appointed by me to do a quarterly review of the 2018 accounting records and aid myself and the bookkeeper in preparation of the [AUD] at year end 2018.”

The town supervisor will be the only one who can make online transfers or bank deposits to the town’s designated bank.

The plan states, “The supervisor accesses the online banking system, moves the necessary funds and confirms to the bookkeeper that those amounts and those accounts were funded before signing and sending checks.”

Town board members will remain up-to-date on any specifics of any financial action that may be addressed at monthly meetings. Perry said board members will be explained in detail everything they are taking action on before they vote.