State audit faults St. Armand accounting
BLOOMINGDALE — The state comptroller’s office has released another rogues’ gallery of municipalities with financial accounting problems, and the little town of St. Armand, population 1,550, with a yearly budget of $1.6 million, is among the culprits.
“Significant deficiencies were found within the town’s accounting records,” Comptroller Thomas DiNapoli said in a press release.
According to the audit, “From 2010 through 2016, the town did not allocate sales tax revenue to its part-town funds to eliminate property tax levies in those funds before allocating any remaining sales tax revenue to its town-wide funds. As a result, $277,744 was improperly allocated to the town-wide general fund causing taxpayer inequities to occur.”
“There was no money missing,” said incoming town Supervisor Dean Montroy, who currently serves on the town board and will take the higher office in January. “There were things we didn’t know we had to do. We had to have a B-fund, and we weren’t even aware of that.”
St. Armand maintains 17 separate funds for town business, including the cemetery, highway, water districts and capital projects. Each fund has its own accounting code, which helps auditors and officials track where the money goes. Since there is also a portion of the village of Saranac Lake within the town, the town has to keep track of funds that come from village residents and allocate them fairly. There were two big capital projects, too, during the audit period: construction of a new highway garage and upgrading the town’s wastewater treatment plant.
The comptroller’s office regularly conducts audits of municipalities in New York state, but St. Armand had not been looked at since 1976. The audit covered a two-year period from Jan. 1, 2015, to Dec. 31, 2016.
The comptroller’s report found the town supervisor, Charles Whitson Jr., had assigned his duties of overseeing the finances to an accountant. In the audit period, three different people served as the accountant.
“If the Supervisor assigns these duties to an assistant, the Supervisor should provide sufficient oversight to ensure the assistant maintains suitable records and documents financial information accurately and on a timely basis,” the report said.
Auditors selected three months to look at closely, and found that at the end of the month the adjusted bank balances didn’t agree with the general ledger balances, with the differences as much as $800,000. “These errors were not properly identified and resolved because no one independently reviewed the bank statements,” the audit said.
According to the report, the town board was at fault, too, for approving checks that hadn’t been properly reviewed. “Although we did not find any material discrepancies, when signed checks are generated prior to the Board’s audit and … claims are actually paid in advance of the Board’s approval, there is an increased risk improper claims could be paid.”
Finally, the water and sewer district bills were inaccurate and not properly maintained. The audit found 20 percent of the bills were inaccurate, “resulting in two customers being underbilled a combined total of $173 and eight customers being overbilled a combined total of $330.” Some customers should have paid penalties for late payments, but never had those penalties applied. Others were penalized for more than they should have been.
“If anybody’s due money, I’m sure they want it back,” said Montroy, who said he found himself underbilled some years ago and had to pay back the difference.
“But, we need to figure out what we’re talking about, and if it’s only a few bucks, is it really worth it?” Montroy said the town is committed to paying back anything due to residents because of accounting mistakes. “Most of the things in the audit have been handled and corrected.”
Whitson and the town board acknowledged the deficiencies and made changes to their procedures. Among these changes, the town clerk will sequentially number claims presented to the board for approval. The board will adopt resolutions that contain exact dollar amounts, so a proper record is kept, and the supervisor will only sign checks after the claims have been audited and approved by the board.
“As the audit progressed and changes were made, as it moves forward I now feel as though with a little bit of fine-tuning, all items will have been addressed,” Whitman wrote in the town’s response to the audit.
“We have to have better policies,” said Montroy. “I’m glad the audit happened, and that it was before my stint.”
Finding certified accountants willing to do the work at a price St. Armand can afford has been a challenge. “We’ve gone through quite a few accountants over the years and there’s just not enough money to pay for it,” said Montroy. Like many small towns, St. Armand employs an accountant one day a week.
“We do have a really wonderful accountant now,” said Montroy.