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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attendant about this, she offered no explanation for the missing and altered
records.
Based on entries made in 2010 by the previous attendant, we conservatively
estimate that annual revenue from swim gate fees was at least $2,000 per year.11
We found that, since July 2011, swim fees were not documented on the report,
entered in the journal book or reported to the Treasurer.12
Missing Entries and Receipts – The attendant was responsible for making
entries to record revenues by the specific program or activity in the journal book.
Entries were handwritten and maintained in a binder. We reviewed entries for
2016-17 and found that the attendant stopped making entries soon after the
start of the fiscal year (June 1, 2016) because very few entries were made after
June 30, 2016. In addition, the attendant’s entries were inaccurate because she
based them on her report and did not include all cash receipted by Department
employees.
Additionally, we found that numerous receipts were missing. When we requested
all receipts written from June 1, 2010 through November 30, 2017, we found that
they were unorganized and included several years with gaps of missing receipts.
For example, all of the receipts from September and October 2014 were missing.
Of approximately 11,000 receipts written for cash or checks during this period,
1,700 were either missing or unaccounted for.
Untimely Deposits – The Board did not adopt written policies and the Supervisor
did not establish procedures to ensure that all cash was deposited timely.
Instead, the attendant was allowed to determine when the cash drawer would
be reconciled and receipts would be deposited. Consequently, the drawer was
generally not reconciled on a regular basis resulting in excessive amounts of cash
being retained for extensive periods.
From June 1, 2016 through May 31, 2017, we found seven instances when more
than $10,000 (cash and checks) and three instances when more than $20,000
(cash and checks) were left in the Department office without the attendant
performing a reconciliation. During this period, an average of 13 days elapsed
between reconciliations and remittance to the Treasurer and in two instances
more than 20 days elapsed. Because Department officials did not reconcile the
drawer in a timely manner, assets were at an increased risk of loss or theft.13
11 During 2010-11, swim fees were $4 per guest and guest use was more limited. Therefore, we would expect
current revenues would likely be much more than $2,000 per year.
12 The previous attendant who retired as of August 1, 2011, documented swim fees on the cash report and also
recorded these revenues in the journal book.
13 Once cash from the Department was remitted to the Treasurer, it was generally deposited within two days.
6 Of f ic e of t he New York State Comptroller