«office new york state comptroLLer of the Division of LocaL Government & schooL accountabiLity Walworth-Seely Public Library Board Oversight report of ...»
office new york state comptroLLer
Division of LocaL Government
& schooL accountabiLity
report of Examination
January 1, 2012 — January 14, 2015
thomas p. Dinapoli
Table of Contents
AUTHORITY LETTER 1
Background 2 Objective 2 Scope and Methodology 3 Comments of Local Officials and Corrective Action 3 BOARD OVERSIGHT 4 Check Signing Authority 4 Credit Card 5 Recommendations 6 APPENDIX A Response From Local Officials 7 APPENDIX B Audit Methodology and Standards 9 APPENDIX C How to Obtain Additional Copies of the Report 10 APPENDIX D Local Regional Office Listing 11 State of New York Office of the State Comptroller Division of Local Government and School Accountability March 2015
Dear Library Officials:
A top priority of the Office of the State Comptroller is to help local government officials manage government resources efficiently and effectively and, by so doing, provide accountability for tax dollars spent to support government operations. The Comptroller oversees the fiscal affairs of local governments statewide, as well as compliance with relevant statutes and observance of good business practices. This fiscal oversight is accomplished, in part, through our audits, which identify opportunities for improving operations and Board of Trustees governance. Audits also can identify strategies to reduce costs and to strengthen controls intended to safeguard local government assets.
Following is a report of our audit of the Walworth-Seely Public Library, entitled Board Oversight.
This audit was conducted pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law.
This audit’s results and recommendations are resources for local government officials to use in effectively managing operations and in meeting the expectations of their constituents. If you have questions about this report, please feel free to contact the local regional office for your county, as listed at the end of this report.
Respectfully submitted, Office of the State Comptroller Division of Local Government and School Accountability
The finance committee consists of a minimum of two Board-appointed trustees.
The Director’s responsibilities include the care of the buildings and equipment,
Credit Card The Board may authorize Library officials to use credit cards for approved, actual and necessary Library expenditures. Effective internal controls over credit card use require the Board to establish a policy that describes the appropriate use of credit cards and the procedures for monitoring card use. It is important that the policy identify the individuals who are authorized to use the credit cards, describe the types of purchases allowed and stipulate the documentation required to support the purchases.
Since credit cards can be used almost as easily as cash, their use has a high level of inherent risk. As the Director had control of the credit card, he could make purchases without prior approval from someone other than himself. This practice increases the risk that improper purchases could be made, because purchases may be made without pre-approvals. Therefore, we reviewed 24 monthly credit card payments totaling $29,160 to determine if the purchases were made in compliance with the credit card and procurement policies. We found that credit card claims were generally itemized and supported with receipts or invoices. However, we identified eight instances totaling $15,534 where the Director exceeded the $1,500 purchasing limit.
For example, the Director purchased a 3-D printer and accessories totaling $1,731. The procurement policy requires that purchases between $1,000 and $2,000 be made after the Director receives and documents three oral bids. If other than the lowest bid is accepted, the Director must state in writing to the Board the reasons why the lowest bid was not selected. There was no evidence to show that three oral bids were obtained prior to making this purchase.
Our overall goal was to assess the adequacy of the internal controls put in place by the Board to safeguard Library assets. To accomplish this, we performed an initial assessment of internal controls so that we could design our audit to focus on those areas most at risk. Our initial assessment included evaluations of the following areas: payroll, purchasing, claims processing, cash management, performed cash counts and information technology.
During the initial assessment, we interviewed appropriate Library officials, performed limited tests of transactions and reviewed pertinent documents such as Board minutes and financial records and reports. After reviewing the information gathered during our initial assessment, we determined where weaknesses existed and evaluated those weaknesses for the risk of potential fraud, theft or professional misconduct. We then decided upon the reported objective and scope by selecting for audit those areas most at risk. We selected controls over financial operations for the period January 1, 2012 through January 14, 2015. To accomplish the objective of this audit and obtain relevant audit evidence, our
procedures included the following:
• We interviewed Library officials, trustees and staff involved in financial transactions.
• We reviewed the Library’s bylaws, Board meeting minutes and policies.
• We selected all cash disbursements from the Director’s assigned checkbook during our audit period to determine if they were for legitimate Library purposes. We also tested a sample of cash disbursements for supporting documentation to determine if purchases were reasonable.
• We reviewed all credit card statements from January 2012 through December 2014 to determine if the purchases were legitimate Library expenditures.
• We reviewed all payments made to the Director to determine if they were properly documented and were reasonable.
• We traced a sample of 20 claims from voucher to abstract to canceled checks to determine if there were any inconsistencies.
• We tested and reviewed 24 payments for the credit card during our audit period to determine if there was proper documentation and if purchases were reasonable and made in accordance with Board policy.
We conducted this performance audit in accordance with GAGAS. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective.
Serving: Allegany, Cattaraugus, Chautauqua, Erie, Serving: Cayuga, Chemung, Livingston, Monroe, Genesee, Niagara, Orleans, Wyoming Counties Ontario, Schuyler, Seneca, Steuben, Wayne, Yates Counties