While purchasing policies were generally adhered to, some $42,570 out of the $484,000 worth of purchases the auditors examined, including leases on three trucks worth $35,203 each, were made without competitive bids, according to the audit. In addition, some $7,367 in purchases that did not require competitive bidding, but should have had quotes from more than one supplier, were not properly documented.
The auditors also found that in some cases the required oversight by the board was lacking, including several hand-drawn checks that were not supported by proper documentation, as well as four credit card purchases that were not supported by proper documentation among the 50 purchases they sampled.
Overall, the auditors found that because the board did not update its procurement policies to address changes in the law, “the policy does not provide clear guidelines for obtaining competitive bids or quotes for public works contracts from $20,000 to $35,000, or purchase contracts from $10,000 to $20,000.”
The audit also stated that all members of the board must look at payment records (or “abstracts”) and sign off on them each month, not just the board member in charge of that particular town department.
Supervisor Kelly Myers responded to the audit. While it covers a period prior to her taking office, she said she began implementing the recommendations immediately.
“We have already put some new procedures in place to tighten up,” she said. “Since I’ve been in office, we have asked for bids from local suppliers, and we have found many items at lower prices.”
Board members must sign off on all bills, rather than just the ones in the departments they oversee, because “we are all responsible for the town’s finances.” She also wants to see department heads check the bills for their department, and have different people write and sign the checks.
Myers said she’s sure the next audit will find some errors on her part, “because the auditors always find some errors, but that’s OK. The audit was an opportunity to move ahead and fix some things. We should all be open to have a second pair of eyes look over our work; it helps us do a better job.”
Computer security and appropriate use
In their audit of the town’s information technology, the auditors found that the town doesn’t have an accurate count of computers or a list of users for its 65 computers, 25 laptops and four main servers. The computers should only be used for official business, but the auditors found that “users visit non-town business sites such as those for social networking, motorsports, guns and shopping.”
The auditors found that the town lacks an inventory of its computers and a policy for informing computer users when their personal information could be compromised.
In her response, Myers states that “the information technology systems in the Town of Saugerties evolved in a fragmented fashion as the technology developed and department needs arose.” While the town began developing an overall system several years ago, it is still in the process of “refining systems to address departmental needs, accountability and security.”
Should the system suffer a catastrophic breakdown, the town could face serious problems as backup tapes are not properly encrypted and are stored at the Town Hall. Tapes should be stored off site, the auditors state.
Court fees and bail
During 2010, the town justices generated approximately $554,700 in fines, forfeited bail, fees and surcharges, according to the audit report.
The auditors found that because the duties of the three court clerks overlapped, it would be possible for one clerk to act alone in handling funds. This weakens the control of cash, they state.
“An effective system of internal controls should include the segregation of duties so that no one person can complete a transaction without another person involved,” the audit report states. The auditors suggest that if the clerical workers’ schedules don’t allow for cross-checking on each other, the justices could be involved in the process.
Bank records and internal records don’t match, the auditors state. Judge Wendy Ricks’ cash was $8,710 less than recorded liabilities, while Judge Daniel Lamb’s was $3,888 more than recorded liabilities.
The auditors performed a “limited bail accountability” audit in February 2011, and found that Judge Ricks’ adjusted bank balance was $10,850 lower than bail for pending cases, while Judge Lamb’s was $3,020 higher. In checking, the auditors found $19,675 in so-called “stale bail,” that is bail that should have been returned following exoneration, but remained unclaimed for more than six years. Unclaimed bail should be returned to the general fund after six years, according to a New York State Attorney General’s website on audits. The auditors note that the town’s accountant had pointed this out in previous reports.
In a response, Justices Lamb and Ricks note that because of scheduling constraints it is not always possible to segregate the clerks’ duties. However, “only one of the clerks writes the checks, which the judges then review and sign. Every month the monthly reports are prepared by one clerk and then reviewed and double-checked by a second clerk.”
In the future, the judges will audit a certain number of receipts each month and compare those receipts to the original payments and deposit slips.
The justices note that court finances are reviewed each year by the town’s accountant, and the court will be conducting monthly bank reconciliations in the future.
The discrepancies in bail amounts came about because the court-computerized records were not up to date at the time the auditors checked them. The judges will work with the town’s accountant to reconcile the accounts, and plan to open a separate account for bail money to keep it separate.