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Letter from Town Supervisor 01/23/15

posted Feb 18, 2015, 11:13 AM by Shari Brooks

Hello Tuxedo,

 

The audit report of our Town’s finances has been completed and published.  You can access the full report here http://www.tuxedogov.org/news  

The audit raised serious concerns about the Town’s accounting.  I would like to point out the following:

  • Immediately after taking office last January, I  learned that the Town’s bank account was overdrawn, even though the financial records showed a surplus.  At once, I requested the Office of the New York State Comptroller to conduct an audit of the Town’s finances.   
  •  I reached out to some individuals in the community with financial backgrounds and formed a citizen’s Financial Advisory Committee to review our finances and make recommendations.
  • The Town Board worked with a consultant to put action plans in place to address the deficiencies.  The consultant, paid with fees from Genting, helped the Town put in place appropriate procedures and controls. The Town’s books are balanced and money has been accounted for.
  • The Town Board hired a new accounting firm to perform audits
  • Moving forward, Bill Sweet will be joining our team to provide oversight and segregation of duties of the Town finances.

 

Below is an article that appeared in the Times Herald Record.

 

State blasts Tuxedo's poor bookkeeping

 

By Hema Easley

Times Herald-Record

Posted Jan. 20, 2015 @ 7:24 pm

 

An audit by the state Comptroller's Office offers a scathing rebuke of Tuxedo's fiscal controls and accounting methods, saying the poor bookkeeping makes it impossible for the state, and the town itself, to determine its true financial condition.

The audit, which covers the period Jan. 1, 2013, to Jan. 29, 2014, found that the supervisor delegated the town's accounting responsibilities to an untrained bookkeeper without providing oversight. The Town Board, in turn, depended on the supervisor's financial updates to make decisions, without ensuring he provided sufficient and adequate information.

The audit also found that certain account balances in the town's ledger did not agree with the audited financial statements. The Town Board and the supervisor also did not ensure that all money spent was for proper town purposes.

The town's accountant did not assess internal controls, ensure financial records were complete or account for court revenue, making Tuxedo's annual audits unreliable, the Comptroller's Office said.

The audit covers the final year of the administration of former supervisor Peter Dolan. Mike Rost, the current supervisor, said he was aware of issues in the town's finances coming in and had asked the Comptroller's Office to perform an audit.

The results were not a surprise. The town was already facing a $1 million deficit, and in October the Comptroller's Office included Tuxedo in its list of municipalities in fiscal stress. In April, the credit rating firm Moody's downgraded the town to A3 from A1 with a negative outlook.

The town received a copy of the audit and accompanying recommendations in December, but Rost and the Town Board had already started implementing changes during the summer in consultation with the Comptroller's Office.

The town let go the accountant who had been overseeing the town's finances for more than a decade, and hired the accounting firm Cooper Arias. It has proposed reducing the responsibilities of its bookkeeper, sending him on training for municipal accounting, and hiring a Certified Public Accountant to provide oversight.

In addition, Tuxedo hired New York City-based Alvarez & Marsal to analyze current policies, establish proper controls, make cost-saving recommendations and assist with police and highway contracts. The consultants were also tasked with helping the town with financial planning for one-, two-, five- and 10-year outlooks.

 

 

Michael Rost

Town Supervisor

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