By HEATHER NELLIS
Recorder News Staff
TOWN OF AMSTERDAM -- An audit of town Supervisor Thomas DiMezza's accounting records and reports for the town's finances indicated untimely and inaccurate record keeping, the state comptroller's office announced on Thursday.
DiMezza on Thursday said the town is working to take corrective action, and deemed issues in the audit as "minor."
The comptroller's office says the town's year-end cash records match, but there are discrepancies in bank reconciliations, account balances, and the annual update documents, which "make it difficult to properly assess the town's true financial condition."
The audit report also says the town board members aren't given monthly information needed to monitor financial operations.
A release said DiMezza's accounting records do not support the AUDs he filed for 2010 and 2011. An AUD is a summary of the town's annual financial information, which should agree to the accounting records, the comptroller's office says.
The books for 2010 and 2011 weren't closed out when officials from Comptroller Thomas DiNapoli initiated the audit in July, and auditors said they found discrepancies between documented bank reconciliations and account balances.
"The lack of timely and accurate financial information led to errors and irregularities that went undetected and uncorrected, while also hampering the board's ability to make sound financial decisions," a release said. "Additionally, the board is unable to know the true financial condition of the town, given that the supervisor's accounting records cannot be relied on."
DiNapoli's office says a supervisor is the chief fiscal officer of a town, and is responsible for performing basic accounting functions, including maintenance of accounting records, providing monthly financial reports to the board, and filing the AUD.
The comptroller's audit examined DiMezza's records and reports for the period of Jan. 1, 2010 and July 31, 2012, which are maintained through the use of computerized accounting software.
A review of the town's accounting records indicated they were not closed for 2010 until after auditors had a discussion with DiMezza in August 2012, the audit says.
In order to close the accounting records, DiMezza prepared entries to balance the funds, "but not based on any sound accounting practices or evidence of errors that warranted adjustments."
For example, the audit says DiMezza made an entry on Aug. 12, 2012 that he dated Dec. 31, 2010, and included one-sided entries to various funds, though they reportedly should be offset by a credit or debit.
"The supervisor does not maintain supporting documentation for the adjusting journal entries made, nor did he obtain approval from the board," the audit reads.
As of November 2012, accounting records were also still open for 2011, the audit says. Similar to 2010 records, "it includes individual funds which are out of balance, although total debits and credits for all funds equal."
For example, the financial overview report has an $102,235 difference between debit and credit balances, yet grand total debits and credits both equal $18,748,818.
"The supervisor indicated the same thing happened with the reports when he closed the records for Dec. 31, 2010, as well as previous years due to problems he had with the accounting software's year-end closing process. He stated the funds have been out-of-balance for this as long as he can remember, and has been serving as supervisor since 2000," the report says.
Reconciliations from the town's 12 bank accounts were also reviewed. The audit says the majority of those funds are "co-mingled" into a single checking account. A bookkeeper reportedly prepares reconciliations to balance all cash, versus cash for each account.
The comptroller's office additionally found that accounting records did not support the AUDs filed by the supervisor for 2010 and 2011, including balance sheet accounts and revenues and expenditures reported in operating statements.
Specifically, 13 cash accounts in 2010, and eight cash accounts were reported inconsistently, the audit says. For example, the 2010 general fund cash account was reported as $119,971 in the AUD, but had a $54,067 balance in accounting records.
Among various funds there were three revenue and seven expenditure accounts that did not agree with amounts reported in the 2010 AUD -- the total dollar amount of all variations equaled $943,017.
Four funds in 2010 and five funds in 2011 had deficit fund balances reported in the accounting records, though deficits were not reported on the AUDs. For example, the audit says the highway fund's reserve was reported as $4,073 in the AUD, but had a $124,909 deficit fund balance in 2011.
"I handle millions and millions of dollars every year for the town's budget, and to me, cash equals cash," DiMezza said. "There are no public funds missing, and these adjustments are just minor as far as I'm concerned."
State comptroller's office Spokesman Brian Butry said "it's a bigger issue of record keeping."
"There will be times in audits where -- hypothetically -- we ask where $10,000 is, and a town may say, 'Hmm, we're not sure.' And then afterward, they come back and say 'Oh we found it, but we lost track of it because we weren't keeping accurate records. Money is unaccounted for because of poor record keeping."
That "hampers the board's inability to make sound decisions," the audit says, additionally noting the town board "does not receive all the financial information it needs to monitor the town's financial operations."
"The only financial reports they receive are monthly operating statements," the audit continues. "We found during testing that the report does not list all monthly transactions."
The town was given 90 days to submit a corrective action plan to the comptroller's office. In a letter from DiMezza to the comptroller's office dated March 27, it says the town's software vending company, and possibly an outside auditing firm, will ensure the necessary changes.