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Audit rips airport finances

January 11, 2012
By JESSICA COLLIER - Staff Writer (jcollier@adirondackdailyenterprise.com) , Adirondack Daily Enterprise

SARANAC LAKE - The town of Harrietstown was criticized in a state audit released Tuesday for mismanaging projects at the Adirondack Regional Airport.

The audit accuses the town of not exercising proper oversight of the airport's capital projects, leaving a $200,000 hole in the town's general fund.

It says that from 2005 to 2010, the town bookkeeper at the time, Brenda LaPierre, inappropriately commingled financing sources from various capital projects at the airport and routinely borrowed money from the town's different funds without town board authorization to make contractor payments. LaPierre resigned a year ago, and the town board eliminated the position.

Auditors accuse the town board of not effectively authorizing nine of 10 projects the comptroller's office reviewed, which meant they were unable to monitor spending or determine if the projects had deficits and required additional funding.

In addition to that, the town overpaid $162,000 in sales tax because LaPierre submitted tax forms incorrectly.

She filled out all the quarterly tax forms between September 2007 and December 2010 incorrectly, and although town officials detected the errors in August 2010, they kept letting her prepare them until her resignation.

The town has since recouped its overpaid sales tax money, but auditors write that it's a concern because the same thing happened between February 2003 and November 2005 - tax forms were filled out incorrectly, leading to overpayment - and it was never corrected.

Airport officials also weren't keeping track of the facility's airplane fuel, which led to more than 4,000 gallons of fuel worth about $15,000 that weren't accounted for, according to the audit. That could result in lost fuel revenues, unauthorized fuel use or failure to detect tank leakage, auditors wrote.

"At a time when local governments should be paying even closer attention to their finances, our audit identified numerous financial missteps that went undetected for many years," Comptroller Thomas DiNapoli said in a press release. "I urge town officials to act on the audit's recommendations immediately."

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Response

Town Supervisor Larry Miller said Tuesday the comptroller's office performed a risk assessment with the town in November 2010 and found some questions and issues, so auditors came back the next month to start an audit investigation.

Miller declined Tuesday afternoon to address any part of the audit specifically, saying he wants to meet with reporters today at the town hall and go over some documents that he says support the town's point of view.

"There's two sides to every story," Miller said. "We believe in our own heart that we were doing this correctly."

But the town submitted a written response to the comptroller's office, which was included as part of the audit report. In that response, Miller said town officials agree with most of the audit's recommendations, but there are a few exceptions.

The audit recommends that the board ensures airport management comes up with procedures for recording fuel inventory daily. Miller wrote that officials are unsure how to deal with that, since a regular stick measure doesn't reflect the fact that temperature changes affect the level of fuel in tanks, which leads to variations in inventory records. He writes that the town board doesn't believe a reasonable solution has been suggested to deal with that issue.

"The town understands the importance of accurate fuel tank measurements, and if satisfactory answers are not obtained, we will consult our engineering firm," Miller wrote.

He also noted town officials were aware of the sales tax issue and have been working with the state Department of Taxation and Finance to fix the problems. The town's letter says it will also try to hire an accountant as soon as possible after Jan. 1, 2012, to replace the bookkeeping position held by LaPierre, and the town's budget officer will review tax returns before they are submitted.

In response to the issues with capital projects and interfund loans, Miller wrote that the town was using an engineering firm that was responsible for filing documentation with state and federal agencies. Miller wrote that the town noticed problems with several projects in 2008 and hired a new engineering firm, Passero Associates, in 2010 to try to correct the problems. The town board is now working with that firm to establish procedures that create paper trails for interfund transfers.

The board "wishes to take issue" with auditors' accusation that the town didn't properly authorize capital projects. Miller's response listed the process the board takes to authorize projects, including publishing bidding notices, formally approving a bid and entering into contracts, and says that board members feel that's sufficient to place the project in the town's records.

Auditors responded to that remark by saying that the board should formally establish a budget for each project in addition to the other steps it takes.

 
 

 

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