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Comptroller finds accounting errors during Herrings audit

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HERRINGS — The state Comptroller’s Office has found there was a lack of oversight by the village Board of Trustees over its clerk-treasurer.

The comptroller’s office recently concluded an audit that monitored the village’s financial operations from June 1, 2011 to Sept. 30, 2012.

The audit concluded “the former clerk-treasurer did not create or maintain cash journals, general ledgers or subsidiary revenue and expenditure ledgers and did not provide a monthly budget-to-actual report.”

Although the board received monthly verbal reports on cash balances, there were no periodic, accurate reports from which the board could effectively monitor the village’s financial activities, the report stated.

“The Board did not establish compensating controls over the clerk-treasurer’s financial duties,” the audit stated.

Without oversight by the board, the opportunity for misappropriation of village funds was available.

“The former clerk-treasurer did not complete monthly bank reconciliations and she paid claims before they were audited and approved by the board,” the audit stated. In addition, the treasurer’s records have not been audited since at least 2007. The comptroller’s report states annual audits would have “identified the serious deficiencies in the accounting records.”

In response, Mayor Richard A. Beirman said he and the current clerk-treasurer, Nancy Gerber, were attending accounting classes offered through the state comptroller’s office at BOCES in Canton. The board is also creating a plan of action to comply with the comptroller’s suggestions.

“I feel good about the audit,” Mr. Beirman said. “I expected the comments and remarks about the accounting and plan to correct the accounting errors.”

He said Ms. Gerber has found unpaid Internal Revenue Service bills for quarterly payments to the state for Social Security, which she has paid along with late payment fines.

“She’s right on the ball and already corrected many mistakes,” Mr. Beirman said.

The board has now adopted the practice of checking the monthly receipts and signing off on the bill prior to payment.

He also noted all the village funds were accounted for.

The audit also found fault in a sale of village property to Mr. Beirman for $500 in 2012. The comptroller’s report said no evidence was found that the village “advertised or solicited offers on the property sold to the mayor, that an appraisal was done, or that they otherwise took any steps to determine the market value of the property.”

The sold 0.16 acre parcel is a corner lot with 133 feet of road frontage on Route 3 and 51 feet of road frontage on First Street. According to information in the audit, the land was one of five separate parcels transferred to the village from a now defunct paper company in 1958. The state comptroller’s document states a 0.09 acre parcel was sold to another village resident in 2001 for $1,000.

Mr. Beirman said he could now see where the board was at fault in the approval of the sale from which he recused himself from voting.

There is still another 0.14 acre of village owned land from the original 1958 sale.

Mr. Beirman said in the future, proper procedure would be followed to ensure sales are in the best interest of the taxpayers.

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