HomeMy WebLinkAbout2000 Audit by Stateco
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H. Carl McCall
Comptroller
State of New York
Office of the State Comptroller
Town of Groton
Report of.Exam'inat'ion
2000M-1 65
Division of Municipal Affairs
H. CARL McCALL
STATE COMITROLLER�T JCC
STATE OF NEW YORK
OFFICE OF THE STATE COMPTROLLER
TO THE SUPERVISORS AND MEMBERS
OF THE TOWN BOARD
OF THE TOWN OF GROTON,
TOMPKINS COUNTY, NEW YORK:
A.E. SMITH STATE OFFICE BUILDING
ALBANY, NEW YORK 12236
Among my top priorities as the State Comptroller is to maintain a strong partnership
between my office and the local governments of New York State. One of the main objectives
of this partnership is to assist local governments in improving their financial condition and
strengthening their financial management systems.
The audit reports issued by my office are an important component in accomplishing this
objective. These reports are expected to be a resource to you. They are designed to identify
current and emerging fiscal problems and provide recommendations for improvement.
Prudent fiscal management, sound fiscal policy and a commitment to working together
will enable us to serve the taxpayers more effectively by making better use of our limited
resources. Toward this end, I look forward to working with your municipality and all other
• local governments throughout the State.
To make our audit report more useful and understandable, it now includes:
♦ Table of contents;
♦ Executive summary to highlight recommendations; and
♦ Headings that separate Findings and Recommendations.
If my office can be of assistance to you or if you have any questions concerning this
audit report, please feel free to contact the local area office for your county listed at the back
of this report.
Sincerely,
�f� '* C4 -5:a
H. Carl McCall
Town of Groton
Page 1
TABLE OF CONTENTS
Section
Page
Executive Summary ......................................................
3
Summary of Recommendations ............................................. 3
Authority and Scope Letter ................................................ 4
Findings and Recommendations
Internal Control and Compliance
Compliance with Procurement Policy ................................. 6
Lack of Departmental Approval of Claims ............................. 7
Appendix..............................................................8
Town of Groton
EXECUTIVE SUMMARY
Our examination disclosed findings which should be reviewed by the Town Board for
appropriate action. Good management practices require that town officials take prompt
action concerning our recommendations. We believe prompt action by town officials will
protect the town's resources from possible loss or improper use, and ensure its compliance
with appropriate statutory requirements. For the ready reference of the reader, the
recommendations are summarized in the following section. However, this is not meant to
serve as a substitute for reviewing the Findings and Recommendations section of the report,
which begins on page 6.
The Town Board should prepare a plan of action that addresses our recommendations
and forward the plan to our office within ninety days. For guidance in preparing the plan of
action, you may refer to applicable sections contained in the publication issued by the Office
of the State Comptroller entitled Financial Management Guide for Local Governments.
We are available to assist you in providing guidance in preparing the plan. The local
area office for your county is listed in the back of this report.
SUMMARY OF RECOMMENDATIONS
• Internal Control and Compliance •
An effective system of internal control is necessary so that the Town Board can have
reasonable assurance that resources are safeguarded and that transactions are executed in
accordance with management's authorization, are in accordance with statutory requirements
and are properly recorded.
Failure to establish proper controls could expose the town's resources to loss or
improper use. The following recommendations help ensure that the town's resources are not
at risk and that transactions are properly authorized and are in compliance with statutory
requirements.
Compliance with Procurement Policy (For Full Discussion See Commentary,
Pa qe 6)
Town officers and employees involved in the purchasing process should adhere to and
the Town Board should monitor compliance with the provisions of the town's adopted
procurement policy and procedures.
Lack of Departmental Approval of Claims (For Full Discussion see
Commentary, Paqe 7)
The Town Board should review the town's claims processing procedures and establish
requirements to help ensure that claims are approved by the appropriate town officer and that
such approval is evidenced on the claim.
Town of Groton
Pa :3
H. CARL McCALL
STATE CONffyrROLLER
)lot
STATE OF NEW YORK
OFFICE OF THE STATE COMPTROLLER
Report: 2000M-165
Filed: September 1, 2000
AUTHORITY AND SCOPE LETTER
TO THE SUPERVISORS AND MEMBERS
OF THE TOWN BOARD
OF THE TOWN OF GROTON,
TOMPKINS COUNTY, NEW YORK:
A.E. SMITH STATE OFFICE BUILDING
ALBANY, NEW YORK 12236
Pursuant to the State Constitution, Article V, § 1 and further authority vested in the State
Comptroller by Article 3 of the General Municipal Law, we have examined the financial
affairs of the Town of Groton.
Our responsibilities are to review the financial condition and fiscal operations of the
town in order to identify areas needing improvement and to inform local officials and the
public of our findings and recommendations. Consistent with these responsibilities, the
objectives of this examination were to identify conditions indicating possible fiscal stress and
to test for noncompliance with certain finance related statutory and regulatory provisions as
well as guidance of the Office of the State Comptroller. It was not our objective to, and we
do not, express an Audit Opinion on the financial statements of the town or provide
assurance as to either its internal control structure or the extent of its compliance with
statutory and regulatory requirements as well as guidance of the Office of the State
Comptroller.
The management of the town is responsible for its financial affairs and for safeguarding
its resources. This responsibility includes establishing and maintaining an internal control
structure to provide reasonable, but not absolute, assurance that resources are safeguarded
against loss from unauthorized use or disposition; that transactions are executed in
accordance with management's authorization and are properly recorded; that appropriate
financial reports are prepared; that applicable laws, rules and regulations are observed; and
that appropriate corrective action is taken in response to audit findings. Nevertheless, errors,
irregularities, or instances of noncompliance may occur and not be detected because of
inherent limitations in any internal control structure.
Town of Groton
Page 4
FINDINGS AND RECOMMENDATIONS
• Internal Control and Compliance •
Compliance with Procurement Policy
Fin ding
We noted instances of non-compliance with the town's adopted procurement policy
which requires town officers and employees to obtain and document quotes received for
certain purchases.
The Town Board adopted a written procurement policy to provide guidance to town
officers and employees involved in the purchasing function. A written procurement policy
is intended to provide sufficient guidance and procedures to help ensure that competition is
sought in a reasonable and cost-effective manner for purchases and public work contracts
where competitive bidding is not required by law (see General Municipal § 104-b). The
town's procurement policy in effect during 1999 and 2000 provided that for a purchase or
public work contract falling under the statutory competitive bidding limits that either written
or oral quotes be obtained depending on the estimated cost of the contract. The town's
procurement policy also requires documentation of all quotes received to support compliance
with the provisions of the policy.
To determine compliance with the town's adopted procurement policy we scanned
abstracts which listed claims audited by the Town Board for the period January 1999 through
April 2000 and randomly selected claims that qualified for the solicitation requirements of
the town's procurement policy. We selected ten purchase contracts having a total cost of
$26,633. We attempted to verify that these contracts had been entered into in accordance
with the town's adopted procurement policy. Of the items selected, documentation was
provided to us by town officials to indicate that the required written or oral quotes had been
obtained for four of the ten items selected. Town officials informed us that verbal quotes
were obtained prior to entering into the other six contracts, totaling $10,500, however,
documentation in support of those quotes was not made available for our examination.
Town officers and employees involved in the purchasing process should comply with
the provisions of the written procurement policy adopted by the Town Board to help ensure
that competition is sought for obtaining goods and services where competitive bidding is not
required by law. Quotes solicited and obtained should be adequately documented and
retained on file to support compliance with the board's policy. The failure of town officers
and employees to follow the procurement guidelines adopted by the Town Board increases
the possibility that goods and services may not be acquired economically, which could result
in excess costs to the town.
Recommendation
Town officers and employees involved in the purchasing process should adhere to
and the Town Board should monitor compliance with the provisions of the town's
adopted procurement policy and procedures.
Town of Groton
Lack of Departmental Approval of Claims
Finding
Certain claims paid chargeable to various town funds lacked evidence of approval by
the town officer whose action gave rise or origin to the claims.
To test for compliance with procedural controls over the approval of claims, we
examined claims paid in April 2000 and December 1999 that were chargeable to the
townwide and part -town general funds, townwide and part -town highway funds, community
development and special district funds. We also examined claims paid in February 2000 and
April 1999 that were chargeable to the townwide and part town general funds. These claims
were audited by the Town Board and allowed for payment. Of the 246 claims tested, 74
lacked a signature on the claim or any other indication thereon of approval by the town
officer whose action gave rise or origin to the claims.
The majority of the claims lacking departmental approval, D2 of 74, consisted of utility
claims (telephone, electric and gas, water). In each of the years 1999 and 2000, there were
26 unapproved utility claims which totaled $9,936 and $7,062, respectively. The cumulative
dollar amount of paid utility claims in 1999 totaled $29,244 and for the period January 1,
2000 to April 11, 2000, totaled $14,480.
With certain exceptions, which appear not to be applicable in these instances, no claim
should be audited and approved for payment by the Town Board unless the claim has first
been approved by the town officer whose action gave rise or origin to the claim (Town Law,
§ 118(1)). Evidence of the approval by the town officer whose action gave rise to the claim,
preferably by signature on the claim or related invoice itself, is needed to attest that the goods
or services, as itemized on the claim, were received by the town and that the charges claimed
are correct. We believe that departmental review and approval of bills submitted for utility
services is important for verifying the reasonableness and propriety of telephone charges as
well as rates and usage for electric, gas and water service.
The failure of the Town Board to properly audit claims for such approval may result in
payments for goods and services which have not been received or billed at incorrect amounts.
Recommendation
The Town Board should review the town's claims processing procedures and
establish requirements to help ensure that claims are approved by the appropriate
town officer and that such approval is evidenced on the claim.
Town of Groton
Page 7
APPENDIX
OFFICE OF THE STATE COMPTROLLER
DIVISION OF MUNICIPAL AFFAIRS
Patricia Lamb McCarthy, Deputy Comptroller
Rosemarie V. Rosen, Assistant Deputy Comptroller
Steven J. Hancox, Assistant Deputy Comptroller
LOCAL AREA OFFICE LISTING
BUFFALO AREA OFFICE
David H. Slusarz, Chief Examiner
Office of the State Comptroller
1050 Ellicott Square Building
295 Main Street
Buffalo, New York 14203
(716) 847-3647 Fax (716) 847-3643
Allegany, Cattaraugus, Chautauqua, Erie,
Genesee, Niagara, Orleans, Wyoming
E -Mail: Muni-Buffaloe..osc.state. nv.us
SYRACUSE AREA OFFICE
Norman E. Bagley, Chief Examiner
Office of the State Comptroller
State Office Building, Room 409
333 E. Washington Street
Syracuse, New York 13202
(315) 428-4192 Fax (315) 426-2119
Herkimer, Jefferson, Lewis, Madison,
Oneida, Onondaga, Oswego, St. Lawrence
E -Mail: Muni-Svracusenosc.state. ny.us
GLENS FALLS AREA OFFICE
Richard H. Dinolfo, Chief Examiner
Office of the State Comptroller
One Broad Street Plaza
Glens Falls, New York 12801
(518) 793-0057 Fax (518) 793-5797
Clinton, Essex, Franklin, Fulton,
Hamilton, Montgomery, Rensselaer,
Warren, Washington
E -Mail: Muni-GlensFalls(a.osc.state. ny.us
HAUPPAUGE AREA OFFICE
John R. Pollack, Chief Examiner
Office of the State Comptroller
NYS Office Bldg. Room 3A10
Veterans Memorial Highway
Hauppauge, New York 11788-5533
(631) 952-6534 Fax (631) 952-6530
Nassau, Rockland, Suffolk, Westchester
E -Mail: Muni-Hauppauaeeosc.state.ny.us
ROCHESTER AREA OFFICE
William W. Campbell, Chief Examiner
Office of the State Comptroller
The Powers Building
16 West Main Street - Suite 522
Rochester, New York 14614
(716) 454-2460 Fax (716) 454-3545
Cayuga, Chemung, Livingston, Monroe,
Ontario, Schuyler, Seneca, Steuben,
Wayne, Yates
E -Mail: Muni-Rochestere.osc.state. nv.us
BINGHAMTON AREA OFFICE
Patrick Carbone, Chief Examiner
Office of the State Comptroller
State Office Bldg. Room 1701
44 Hawley Street
Binghamton, New York 13901-4417
(607) 721-8306 Fax (607) 721-8313
Broome, Chenango, Cortland, Delaware,
Otsego, Sullivan, Tioga, Tompkins
E -Mail: Muni-Binahamton aeosc.state.nv.us
ALBANY AREA OFFICE
Thomas J. Kelly, Jr., Chief Examiner
Office of the State Comptroller
22 Computer Drive West
Albany, New York 12205
(518) 438-0093 Fax (518) 438-0367
Albany, Columbia, Dutchess, Greene,
Orange, Putnam, Saratoga, Schenectady,
Schoharie, Ulster
E -Mail: Muni-Albanv anosc.state.ny.us
Town of Groton
Pa e 8
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H. CARL MCCALL
STATE COMPTROLLER
Glenn E. Morey
Supervisor
Town of Groton
101 Conger Blvd.
Groton, NY 13073
Dear Mr. Morey:
STATE OF NEW YORK
OFFICE OF THE STATE COMPTROLLER
September 1, 2000
A.E. SMITH STATE OFFICE BUILDING
ALBANY, NEW YORK 12236
2000M-165
Town of Groton
Enclosed is a Report of Examination for the 'Town of Groton prepared by the Office of the State
Comptroller. A copy of the report has been mailed to the person responsible for filing such report and
making it available for public inspection.
The examination was made, and report prepared, in accordance with the authority granted to the State
Comptroller by the State Constitution, Article V. § 1 and Article 3 of the General Municipal Law. The report
should be studied by all appropriate officials and a written response to the audit findings should be prepared
and filed within ninety days, pursuant to Subdivision 4 of Section 35 of the General Municipal Law. The
development of a corrective action plan and its implementation are important steps in improving financial
management. Section 11.4 of the Financial Management Guide for Local Governments issued by the Office
of the State Comptroller discusses the filing requirements and provides guidance concerning the preparation
of a written response. The written response should be addressed to:
Office of the State Comptroller
Division of Municipal Affairs
Bureau of Examinations
A.E. Smith State Office Building - 10th Floor
Albany, NY 12236
I trust that this report will be of assistance in improving fiscal operations as Comptroller McCall is
dedicated to maintaining a strong partnership with the local government officials of New York State. If you
require assistance or if you have any questions, please feel free to contact the local area office for your
county listed at the back of the enclosed report.
Very truly yours,
01
Ui.
�L
Patricia Lamb McCarthy
Deputy Comptroller
PLM:rh
Enc.
Torun Justices (607)898-5273
Arland L. Hefiron
Arthur D. Dawson
Code Enforcement (607)898-4428
Mark D. Gunn
Supt. of Niglr%,qus (607)898-3110
Richard C. Case, Jr.
Far Miniber (607')998-3086
October 19, 2000
Town of
Groton
1'O Box 36. 101 Conger Boulevard , Groton NY
13073
Patricia Lamb McCarthy
Deputy Comptroller
Office of the State Comptroller
Division of Municipal Affairs
Bureau of Examinations
A.E. Smith State Office Building — 10th Floor
Albany, N.Y. 12236
Dear Ms. McCarthy,
Supemisor (607)898-5102
Glenn E. Morev
7Mvii Clark (607)898-5035
Colleen D. Pierson
Councilmen
Ellard L. Sovoco of
Donald F. Schefller
Duane T. Randall, II
Sheldon C. Clark
The Office of the State Comptroller recently conducted an audit for the Town of Groton's fiscal operation
for the period of January 1, 1999 through April 7, 2000. This letter constitutes the official response to the
State Comptroller from the Town of Groton concerning the certain findings and recommendations which
are presented in the Report of Examination, 2000M-165.
Written Finding,
The results of the examinations procedures disclosed two written findings, Compliance with Procurement
Policy and Lack of Departmental Approval of Claims. The Town agrees with both findings.
Compliance with Procurement Policy
To determine compliance with the Town's adopted procurement policy the audit scanned abstracts which
listed claims audited by the Town Board and randomly selected claims that qualified for the solicitation
requirements of the Town's Procurement Policy. Ten purchase contracts were selected and four of the ten
items indicated that the required written or oral quotes had not been obtained.
Town Action - Town officers and employees involved in the procurement process will adhere with the
Town's newly adopted procurement policy and procedures. The Town Board amended the Town of
Groton Procurement Policy on August 8, 2000, see Procurement Policy attached.
Lack of Departmental Approval of Claims
Certain claims examined the were paid chargeable to various town funds lacked evidence of approval by
the town officer whose action gave rise or origin to the claims.
Town Action — The Town Board will not approve any claim unless the town officer whose action gave rise
or origin to the claim has first approved the claim. All utility invoices will have all department heads
signature or initials for approval. The Supervisor will initial or sign all vouchers for approval prior to
presenting to the Town Board for their approval for payment.
Thank you for the professionalism shown us during our audit If you should have any furthers questions or
comments, please contact me at 607-898-5102 or at 607-255-7402.
Sincerely,
Glenn Morey
Supervisor
Town of Groton