Village News

Valley Stream ups financial controls after audit

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Auditors from the state comptroller’s office detailed a number of problems with Valley Stream’s financial operations, most notably how cash is handled, and made recommendations to improve them in a report released earlier this month.

The audit of the village covered 2010 to 2012. Officials say that several recommendations were being implemented before the audit was made public.

Auditors cited weaknesses in cash collection procedures at the village pool, the clerk’s office, the Highway Department and Waldinger Library. They said that the practices that were in place left village officials without adequate assurance that all money collected was accounted for.

During the audit period, the village collected $660,000 in pool admission fees. Auditors reviewed receipts for 29 days, totaling nearly $15,000. In some instances, cash register tapes and staff logs did not match up. There were also discrepancies between admission logs and daily reports to the treasurer.

In the clerk’s office, money that was collected by staff for various transactions, such as parking permits, was kept in an employee’s desk drawer and turned over to the treasurer at the end of the day. According to the audit, the treasurer did not receive a copy of the receipts that were issued.

Auditors reviewed one week’s worth of collections, and while they found that the amount of money deposited in the bank matched the amount recorded in the computer system, copies of 46 manually issued receipts were not available.

Two employees in the Highway Department are responsible for collecting money from village parking meters. Auditors were critical of the fact that the employees make the collections alone, without any supervision. The coins are stored in a safe for one to three days until they are counted.

The audit stated that all the coins were mixed together, not counted based on the collection routes or the individual employees. “Village officials could not perform any meaningful trend analysis,” the audit stated, “to mitigate the inherent risk associated with unsecured parking meter collections. The lack of necessary controls over the collection and deposit of parking meter coins significantly increases the risk that money could be lost, stolen or misappropriated without detection.”

The village collects about a half-million dollars a year in money from the meters. Village Treasurer Michael Fox said that some of the recommendations would be implemented, but he also said that adding staff for meter collections is out of the question, because that would cost more than any potential savings.

At the library, fines collected for lost or overdue books were kept in an unlocked cash box, and no records were kept of how much money was collected by each employee. A daily log was kept, but the library did not have copies of the receipts.

Mayor Ed Fare said that a new recreation management system is being implemented, with new computer hardware and software, which is expected to resolve issues at the pool. Old cash registers from the pool will be moved to the library to provide more secure storage of money there.

Fare said that no policies had been developed at the library because the amount of money it collects is minimal. The library brings in about $35,000 a year in revenue, or about $110 a day. “The cash register is definitely worth more than what’s in it,” he said.

Auditors were also critical of the village’s payment policy: The treasurer is both the custodian of Valley Stream’s money and its claims auditor. The auditors said that in the interest of adequate checks and balances, the two functions should not be performed by the same person.

“Village and library officials told us that their respective boards do not audit the claims because it is too time-consuming,” the auditors said. Fox noted that having them review all claims is impractical because they are part-time board members who have full-time jobs.

In the past, the duties would alternate between two members of his office staff, a practice that will be change. As a result of the audit, the village would add a claims auditor, a duty assigned to an employee in another department.

The village treasurer should be the one signing the checks, the audit noted, which has not been the case but is the law. Up to now, the treasurer has electronically added the signatures of the mayor and a trustee to all checks.

Auditors reviewed 50 checks totaling about $192,000, all filled out that way. “Although these payments appeared to be for proper village purposes,” auditors said, “this arrangement is contrary to village law. It also creates an environment where the treasurer has total control over the disbursement process without the essential checks and balances required by law.”

Village officials say that Fox will now sign checks, and Fare will be present whenever his signature is added electronically.

Despite its criticism, Fare said the comptroller’s office found no instances of waste, fraud or abuse. “We met with auditors; they were very complimentary,” he said. “They said there’s no money missing from anywhere.”

The village is required to submit a corrective action plan with 90 days of the audit, and is encouraged to make that plan available to the public.

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