Democrat File Photo
LUMBERLAND SUPERVISOR JOHN LiGreci defended his role as town’s chief financial officer.
Audit critical of Lumberland's operations
By Susan LeBar
GLEN SPEY The New York State Comptroller’s Office has officially released the completed audit for the Town of Lumberland, and some of the news was not so good.
The audits seek to help governments improve their financial management practices and make sure proper policies and procedures are in place to help protect taxpayer dollars and provide the best possible service.
In regards to the Town of Lumberland the audit noted that the supervisor’s duties were not properly segregated and his financial activities were not accounted for or reported in a reliable and timely manner. One example noted in the audit was that Supervisor John LiGreci did not ensure that his assistant prepared the bank reconciliations during 2007, and although the reconciliations that she did prepare in 2008 were mathematically correct, they included numerous accounting errors totaling $108,000.
Also noted in the audit was the fact that the accounting program did not prevent users from removing or modifying transactions and could not produce audit logs. As a result, there was an increased risk that town assets could be misused, financial records could be altered and that the board will make erroneous financial decisions.
The Comptroller’s Office tested 177 receipts totaling $1.5 million and 193 disbursements totaling $564,000 by tracing bank statements and the activity with other accounting records to determine if the bank statements agreed with the records.
It did not find any material errors or discrepancies.
The audit also noted that the supervisor did not provide sufficient oversight to his assistant. It found that the supervisor’s assistant did not prepare bank reconciliation during 2007 and the ones that were prepared in 2008 contained numerous errors totaling $108,000.
LiGreci was noted in the report as stating that the errors were created by a significant turnover in the assistant position and the use of a previous accounting system, which was too complicated for the assistants to understand.
The supervisor also did not file the town’s annual financial report called the annual update document (AUD) in a timely manner. The 2006 AUD was not filed until January 31, 2008, which was 276 days late, and the 2007 AUD was filed October 14, 2008, 168 days late. In addition, the supervisor did not present his records for the 2007 fiscal year to the board for audit and the board did not audit, or cause an audit, of his records as required.
“An audit will always find that procedures can be improved, and that’s a good thing,” LiGreci said in an interview on Wednesday, adding that the bottom line was accounting for funds, and according to him, “Every penny was accounted for.”
court, fuel supplies
The report also found fault in Lumberland’s Justice Court operations.
The justices did not provide adequate oversight over the court clerk. One example noted in the report was that the court clerk’s cash receipt and disbursements duties were not segregated and although the justices occasionally signed checks and monthly reports to serve as compensating control, the monthly reports did not include bail activity.
Also noted in the report was that the diesel and unleaded fuel supplies were not adequately safeguarded and accounted for.
The report noted that the town paid $113,000 for diesel fuel and $13,000 for unleaded fuel during the audit period, and that perpetual inventory records were not maintained, no one inventoried the fuel on hand and physical safeguards such as locks were not implemented. It added that the supervisor did implement some control during the audit period but that there is still an increased risk of unauthorized use or theft of fuel that would not be detected.
The report further noted that the town’s financial activity has not been accounted for and reported in a proper and timely manner and as a result, the board’s ability to monitor and manage the town’s financial resources is severely diminished and there is a increased risk that errors and irregularities could occur and remain undetected and uncorrected.
The Comptroller’s Office also noted in the report that the findings and recommendations were discussed with town officials, as were a list of recommendations to correct the problems.
“Lumberland is in good shape,” said LiGreci, noting that when he took over in 1999, “finances were a mess.”
“We have $400,000 in the reserve fund, a new highway barn and we’re renting the old barn to the Eldred school district for $100,000 a year and all of our highway department equipment is five years old or newer,” LiGreci pointed out.