State finds fault in Otselic audit
The Otselic Town hall.
OTSELIC - The Otselic Town Board says it’s correcting some of the shortcomings found in a recent New York State Comptroller’s audit of the town’s financial records.
“There’s work that’s been done on compiling the records that the auditors seem to think the board wants to see,” said Otslic Town Supervisor Marjorie Davis. “We’re addressing those recommendations and implementing them as the board sees fit.”
The comptroller’s report released on Friday highlights issues the town had with reporting accurate and timely information, as well as a conflict of interest triggered by a board member who may have benefited from a contract between the town and his auto parts business.
Among key findings in the report, the town supervisor failed to provide her board with accurate financial reports. Deposits totaling $127,000 were not recorded in accounting records, nor were cash withdrawals totaling $199,000 and fund transfers totaling $847. One deposit of $25,000 was recorded twice.
The report states that the supervisor was not familiar with the town’s bookkeeping software, but she intends to find training on how to use it.
The report also found that the town board did not annually audit the supervisor’s records. Board members said they were unaware of annual audit requirements because the supervisor submitted financial reports at each monthly meeting. However, without an annual audit, the State Comptroller’s Office says the board couldn’t be certain about all of Otselic’s financial resources and that the mistakes found in the state’s audit could have been prevented.
The audit additionally found that the town did not file required financial reports for 2016-2019. Davis took office in 2018; but the prior supervisor hadn’t filed annual financial updates for 2016 or 2017. Davis said she was unable to file 2016-2017 reports because she didn’t have access to the prior supervisor’s records. What’s more, because the 2016 and 2017 reports weren’t filed, Davis has been unable to file reports for 2018-2019.
One other crucial finding of the report is that the Otselic Town Board hadn’t adopted a code of ethics, as required by law. The audit found one board member, the president and stockholder of two auto supply businesses from which the town purchases supplies, may have benefitted. Investigators found 17 invoices totaling $5,318 in purchases.
“As an owner of 5 percent or more of the stock in each business, the board member has an interest in each contract because the board member received a direct or indirect pecuniary (monetary) or material benefit as a result of the contracts,” the report says. “As a member of the board, the board member also has one or more of the powers and duties that can give rise to a prohibited interest, including the ability to authorize or approve contracts, authorize or approve payments under contracts, audit bills or claims under the contracts or appoint someone to perform that function.”
Davis said the town board has adopted a code of ethics since the audit.
In a response to the State Comptroller’s Office, the Otselic Town Board said it “accepts the report, with reservation.”
“The board acknowledges that it has not received nor asked for several of the monthly reports recommended,” the letter states. “However, the board has received and reviewed financial reports from the supervisor at every meeting since the current supervisor took office January 1, 2018. The supervisor has shared extensive financial data with the board and had the approval of the board on major financial decisions. Despite the financial distress caused by the COVID-19 pandemic, the financial health of the town is robust and the taxable dollars asked of our citizens has decreased for the past two years.”
The town also argued the accusation that a town board member may have used his authority to leverage a contract between the town and his auto supply stores, saying that “In a small town, such as Otselic, conflicts of interest are nearly impossible to avoid. It is difficult to secure interested, qualified persons to fill all the necessary town positions without resorting to extended families of elected officials.”
In addition to adopting a code of ethics, the State Comptroller’s Office offered recommendations that Otselic maintain accurate and timely financial records, and that the town board file annual financial reports on time.
“There’s work that’s been done on compiling the records that the auditors seem to think the board wants to see,” said Otslic Town Supervisor Marjorie Davis. “We’re addressing those recommendations and implementing them as the board sees fit.”
The comptroller’s report released on Friday highlights issues the town had with reporting accurate and timely information, as well as a conflict of interest triggered by a board member who may have benefited from a contract between the town and his auto parts business.
Among key findings in the report, the town supervisor failed to provide her board with accurate financial reports. Deposits totaling $127,000 were not recorded in accounting records, nor were cash withdrawals totaling $199,000 and fund transfers totaling $847. One deposit of $25,000 was recorded twice.
The report states that the supervisor was not familiar with the town’s bookkeeping software, but she intends to find training on how to use it.
The report also found that the town board did not annually audit the supervisor’s records. Board members said they were unaware of annual audit requirements because the supervisor submitted financial reports at each monthly meeting. However, without an annual audit, the State Comptroller’s Office says the board couldn’t be certain about all of Otselic’s financial resources and that the mistakes found in the state’s audit could have been prevented.
The audit additionally found that the town did not file required financial reports for 2016-2019. Davis took office in 2018; but the prior supervisor hadn’t filed annual financial updates for 2016 or 2017. Davis said she was unable to file 2016-2017 reports because she didn’t have access to the prior supervisor’s records. What’s more, because the 2016 and 2017 reports weren’t filed, Davis has been unable to file reports for 2018-2019.
One other crucial finding of the report is that the Otselic Town Board hadn’t adopted a code of ethics, as required by law. The audit found one board member, the president and stockholder of two auto supply businesses from which the town purchases supplies, may have benefitted. Investigators found 17 invoices totaling $5,318 in purchases.
“As an owner of 5 percent or more of the stock in each business, the board member has an interest in each contract because the board member received a direct or indirect pecuniary (monetary) or material benefit as a result of the contracts,” the report says. “As a member of the board, the board member also has one or more of the powers and duties that can give rise to a prohibited interest, including the ability to authorize or approve contracts, authorize or approve payments under contracts, audit bills or claims under the contracts or appoint someone to perform that function.”
Davis said the town board has adopted a code of ethics since the audit.
In a response to the State Comptroller’s Office, the Otselic Town Board said it “accepts the report, with reservation.”
“The board acknowledges that it has not received nor asked for several of the monthly reports recommended,” the letter states. “However, the board has received and reviewed financial reports from the supervisor at every meeting since the current supervisor took office January 1, 2018. The supervisor has shared extensive financial data with the board and had the approval of the board on major financial decisions. Despite the financial distress caused by the COVID-19 pandemic, the financial health of the town is robust and the taxable dollars asked of our citizens has decreased for the past two years.”
The town also argued the accusation that a town board member may have used his authority to leverage a contract between the town and his auto supply stores, saying that “In a small town, such as Otselic, conflicts of interest are nearly impossible to avoid. It is difficult to secure interested, qualified persons to fill all the necessary town positions without resorting to extended families of elected officials.”
In addition to adopting a code of ethics, the State Comptroller’s Office offered recommendations that Otselic maintain accurate and timely financial records, and that the town board file annual financial reports on time.
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