Publisher's summary
The Board and Village officials did not establish adequate internal controls over Department cash receipts. The Board did not adopt written cash receipt policies, cash receipt duties were not properly segregated and the Supervisor did not adequately oversee the cash receipt function. As a result, the attendant had almost complete control over the cash receipts without adequate oversight. From August 1, 2011 through November 30, 2017, we reviewed approximately 2,000 receipts issued by Department employees for cash collections totaling approximately $264,000. We estimate that additional unreceipted cash of $14,000 was collected for swim gate fees during this period. However, the attendant reported cash collections of approximately $107,700, a cash shortage of more than $170,000. During this period, less than half the amount of cash receipted by employees was remitted to the Treasurer. OSC's Division of Investigations in conjunction with the Erie County District Attorney's Office jointly investigated this matter. In October 2018, the attendant admitted stealing more than $150,000 from the Village and altering public records from 2011 through 2017. She pleaded guilty to grand larceny, false filing and official misconduct in October 2018 and was sentenced in March 2019. As part of her sentence, she repaid the Village $156,374.
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Recreation Department Cash Receipts
Department staff oversee the Village parks, playgrounds, swim center, youth
center and community center. The Department provides various youth, athletic
and educational programs, such as after school and summer programs, flag
football, an annual golf tournament, swim center memberships and facility rentals.
Residents and non-residents are charged a fee for program participation.
Department staff accept only cash or checks and prepare a press-numbered
duplicate receipt as evidence of payment. One receipt copy is provided to
the customer and the other copy is retained. The attendant is responsible for
various Department accounting duties including collecting fees, writing receipts,
reconciling the cash drawer, preparing cash collections for deposit and organizing
and storing the Department’s receipt copies.2 On August 1, 2011, the Board
promoted a part-time recreation employee to the full-time attendant position.
Cash and checks collected are remitted to the Treasurer for deposit. A clerk in the
Treasurer’s office verifies the amount submitted and provides the Department with
a receipt as confirmation of the amount remitted.
How Should Village Officials Safeguard Cash Receipts?
The Board, together with the Mayor, Treasurer and Supervisor, is responsible
for providing adequate Department oversight. This includes establishing internal
controls to provide reasonable assurance that cash is safeguarded and financial
transactions are properly recorded. Such controls should include adopting written
cash receipt policies, segregating key duties to ensure that one employee does
not perform all phases of a transaction, using press-numbered duplicate receipts,
ensuring that transactions are properly recorded and accounting records are up-
to-date, complete and accurate.
The Supervisor is responsible for overseeing financial operations, the programs
and services offered and ensuring that personnel follow Board policies and
procedures. Accordingly, the Supervisor must ensure that all cash collected is
properly accounted for, receipted, recorded and remitted to the Treasurer in a
timely manner.3
Collection, Receipting and Remittance Procedures Were Inadequate
The Board and Village officials did not establish adequate internal controls over
Department cash receipts. The Board did not adopt written cash receipt policies,
cash receipt duties were not properly segregated and the Supervisor did not
2 The attendant was responsible for organizing receipts sequentially, bundling them in groups of 100 and
securing them in a storage room.
3 The Board may establish guidance in a written cash receipts policy that follows the statutory guidance
established for the treasurer in New York State Village Law, Section 4-408 (10 days). Alternatively, it may require
more frequent deposits. From an internal control perspective, the best approach is to deposit money as soon as
possible. The longer money remains undeposited, the greater the risk that loss or theft can occur.
2 Of f ic e of t he New York State Comptroller