Town of Homer officials were audited by New York state following the discovery of duplicate payments.
An audit report from the Office of the State Comptroller stated that the town’s supervisor, Fred Forbes, and the town board “did not provide adequate oversight of non-payroll disbursements.”
The report comes from the state audit period between January 2021 and June 2022. The period, however, was shortly extended to November 2022 to “to determine whether specific reimbursements were deposited.”
The result showed the town allegedly made duplicate payments totaling $79,806, increasing the risk of potential errors or irregularities that “could occur and remain undetected and uncorrected,” the report noted.
- Segregate the duties or implement compensating controls relating to non-payroll disbursements. As a result, checks and balances over the powers and duties of the supervisor and town clerk were not established
- Establish procedures to detect and prevent duplicate payments from occurring
- Conduct or ensure an annual audit of the Supervisor’s records and reports was performed, as required
Auditors provided recommendations for the town, including:
- Segregating non-payroll disbursements duties or implementing adequate compensating controls
- Reviewing bank reconciliations, bank statements and canceled check images to ensure bank transactions are appropriate
- Annually auditing the Supervisor’s records, as required
“The town recognizes the need for separation of duties when it comes to non-payroll disbursements,” Forbes said in a letter to state auditors. “The town believed that by having the board review and approve all disbursements, then review the payment transactions report the following day it had achieved a separation of duties. In addition to the above the board also retained the services of a third party to prepare the bank reconciliations. These steps were taken to provide oversight and have separation of duties.”
In the letter, Forbes said, however, that town officials disagree with the conclusion of the state auditors’ report. Forbes noted the town board approved the payment of $76,901 for highway equipment.
“The payment was made through the bill payment system,” Forbes said. “The bill payment system issued this payment as a credit card which the vendor rejected. The system then reissued the payment as a check. There was never a duplicate payment. The funds only came out of the account once. This simply was an error on the part of the bill paying company. As with any new system there was a learning period for both the town and the bill payment company. These items have been identified and corrected.”
State auditor replied to the town’s letter, saying that “our audit identified $79,806 in duplicate payments. Regarding the $76,901 duplicate payment, our audit report states that the board approved one payment, but the bill payment vendor issued two payments for $76,901 each. More specifically, an electronic check was paid to the vendor and deducted from the Town’s bank account on August 3, 2021. In addition, a separate hard copy check was mailed to the same vendor. On August 17, 2021, the vendor returned the hard copy check to the Town with a note to void it and stating payment was already accepted via the electronic check (as) mentioned.”
Forbes stated in the letter that the town, from now on, will take the following steps:
- The town board will annually prepare an audit of the supervisor’s records and reports
- The town board will review the bank reconciliations on a monthly basis
- The supervisor or the deputy supervisor will initiate all bank transfers
A full breakdown of the state auditor’s report on the town of Homer can be viewed by clicking here.