While the independent audit on Tarrytown finances showed the Village flush with funds, receiving "the best opinion you can get" from the firm, Sleepy Hollow got a minor slap on the wrist recently from the State Comptroller's Office. 

A State audit of Village finances spanned the period from mid-2009 through mid-2011, and comes in addition to the independent auditing the Village also routinely conducts each year. According to Village Administrator Anthony Giaccio, the State audit might have been random or prompted by a complaint, perhaps from previous interactions with the state comptroller who might have had questions about the Village's accounting practices. 

Initially when the Village learned they would be audited, Giaccio said “we were happy about it. We want to correct anything we're doing wrong.” 

The results showed, he said, “I don't want to use the word 'minor' but very correctable flaws. Nothing of fraud or a significant amount of money that we couldn't account for. Just some problems with our procedures.”

We've attached both the audit report in full to this article in PDF, along with the letter Mayor Ken Wray wrote in response to Christopher Ellis, Chief Examiner of Newburgh Regional Office of the State Comptroller. 

Here are the key points the audit made in summary on the three main subjects of investigation -- Cash Receipts, Police Time and Leave Accrual Records, and Financial Records and Reports -- followed by excerpts from the response of Wray.

1. Cash Receipts

AUDIT SUMMARY:

Neither the Board nor Village officials developed processes to safeguard and account for cash receipts. Finance Department employees did not always issue pre-numbered duplicate receipts for cash collections. We found three instances where payments totaling $1,410 were posted as cash but no documentation was provided to show that cash receipts were deposited into the Village’s bank accounts. In addition, we found four cash payments totaling $1,558 that were deposited into the Village’s bank account but cash receipts were never posted to the Village’s financial accounting system, and two receipts that were posted 13 to 29 business days after they were deposited. As a result, there is an increased risk that cash receipts are not properly accounted for and that loss, theft, or misuse of funds could occur.

MAYOR:

The Board hired our current Treasurer six months prior to the audit; with the previous Treasurer not employed by the Village for over four months before that. At the time of the audit, the Village was in the middle of a full conversion to and training for a new Financial System, while being down one full time employee and training a new hire. We believe these staffing issues contributed to the processing discrepancies identified in the audit.

2. Police Time and Leave Accrual Records

AUDIT:

The Board’s failure to establish written policies and procedures for the Police Department’s time and accrual records resulted in inaccurate time and attendance and leave time records. As a result, two police officers received sick leave bonus benefits that they were not entitled to, one officer used compensatory (comp) time three times that wasn’t earned, and three officers were allowed to accumulate more comp time than allowed.

MAYOR:

The Board agrees with your recommendations regarding written polices and procedures for the police department payroll. We understand that these procedures should require officers to submit time sheets to document their hours worked, and which should be signed by all officers and supervisors. 

3. Financial Records and Reports

AUDIT:

The Village’s financial records and reports are also not accurate and complete. Due to a lack of Board oversight, the Treasurer’s cash control accounts did not reflect actual cash balances and parking permit sticker revenues were incorrectly deposited into the general fund, resulting in unrecorded transfers and the incorrect use of enterprise fund moneys for general fund expenditures. Bank reconciliations have not been completed, in some instances since June 2010, and the Treasurer has not filed the 2009-10 annual financial report with the Office of the State Comptroller and has not provided monthly financial reports to the Board. As a result, the Board’s ability to manage financial resources and detect errors or irregularities and the transparency of Village operations are compromised.

MAYOR:

The Village now has a comprehensive and efficient Financial System which has integrated three different systems and automated many manual duties. The Treasurer has established procedures and controls to ensure bank reconciliations are done on a timely basis and that financial reports are distributed to the Finance Committee and Board periodically.

In conclusion, I want to again thank you and your staff for your recommendations and expertise. Our goal as a Board is to efficiently manage operations and provide transparency, while ensuring our residents continue to be provide with excellent service at the lowest possible cost. The Village will continue to monitor its systems and controls and continue in its efforts to safeguard Village assets. 

In response, the Village was required to submit a Corrective Action Plan, which was no problem as they were already implementing some of these changes, and “exactly what we were hoping for came out," said Giaccio.

While they welcomed the extra oversight, Village officials took offense to what they felt was harsh language in the report. We were told, said Giaccio, that it was “very boiler-plate language, whether it was about $100,000 or $1,000. We objected to what sounded like grandstanding in making them sound like egregious errors. For the magnitude of the deficiencies we thought it was inappropriate."

But, to add some perspective, Sleepy Hollow isn't alone. Irvington was targeted for a State audit as well, and “a lot of other municipalities have it much worse," Giaccio said, adding that it “all makes us keep ourselves in check.”