Bovina audit calls for tighter controls
By Brian Sweeney
The Town of Bovina needs to exercise tighter internal controls over its bookkeeping practices, a state audit has determined.
The audit, released last week by the NYS Comptroller’s Office, listed four recommendations for the township to improve bookkeeping methods.
The findings included:
• The board should adopt written policies and procedures that include segregating incompatible functions over the cash receipts and disbursements, where possible, or implement compensating controls where segregating incompatible functions is not possible.
• The board should discontinue delegating the supervisor’s check signing authority to the bookkeeper.
• The supervisor should continue manually signing all town checks.
• The board should periodically compare the approved warrants with the checks cleared, as shown on the bank statements, and review the bank reconciliations.
• The board should thoroughly document its annual audit process in the board minutes.
In explaining their findings, the auditors noted that the supervisor is responsible for making payment on all items on the warrants (lists of claims to be paid), after the items have been approved and audited by the town board. It was pointed out that Supervisor Tina Mole should properly authorize town disbursements by afﬁxing her signature to all checks.
It was further concluded that the supervisor “may allow another town ofﬁcial to sign checks with a facsimile of her signature, afﬁxed by a check-signer or other machine (requiring a password), but only under her supervision.”
System not secure
The auditors explained, “A rubber stamp of a signature may not be used, as it can be easily replicated and, therefore, is not secure.”
During the audit period, 1,630 checks totaling approximately $2.3 million were written. The bookkeeper told the auditors that he applied the supervisor’s signature with a rubber stamp to sign checks throughout the audit period (January 1, 2011-Oct. 15, 2012) and also signed checks with his own signature. The audit indicates that the supervisor reassumed the duty of signing checks on October 4, 2012, after the bookkeeper attended training.
The supervisor told the auditors that she did not realize that the bookkeeper had not authority to sign town checks.
It was also noted that town law requires the board to annually audit, or provide for the audit of, the records and reports of any town officer or employee who received or disbursed moneys on behalf of the town.
The auditors determined that the board and supervisor “did not adequately segregate duties related to the collection, recording and depositing of receipts, the preparation and recording of disbursements and bank reconciliations.”
Lack of oversight
It was revealed that, “the supervisor’s bookkeeper collects cash, prepares and makes deposits and records receipts for money received by the supervisor. The bookkeeper also prepares checks, records disbursements and completes the monthly bank reconciliations. The bookkeeper performed all these duties with little oversight by the supervisor.”
Another issued cited was that no one compares the approved claim warrants to the checks that cleared the bank, and there was no documentation of an annual board audit of the supervisor’s records.
“As a result, there is an increased risk that errors and irregularities may occur and remain undetected and uncorrected,” the auditors wrote.