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1990-12-31 . ., TOWN OF WAPPINGER, NEW YORK FINANCIAL STATEMENTS . AS OF AND FOR THE YEAR ENDED DECEMBER 31. 1990 ., ., ,. , TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31. 1990 DESCRIYflON PAGE II' Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Independent Auditors' Report on Internal Control Structure Related Matters Noted in a Financial Statement Audit Conducted in Accordance With Government Auditing Standards ......................................... .2-4 Independent Auditors' Report on Compliance With Laws and Regulations Based on an Audit of General Purpose Financial Statements Performed in Accordance With Government Auditing Standards Issued by the GAO ................... 5-6 . GENERAL PURPOSE FINANCIAL STATEMENTS Combined Balance Sheet - All Fund Types and Account Groups ................................................... .7-8 Combined Statements of Revenues, Expenditures and Changes in Fund Equity - All Governmental Fund Types ... . . . . . . . . . . . . . . . . . . . . . . .9-10 . Combined Statements of Revenues, Expenditures and Changes in Fund Equity - Budget and Actual - General and Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-12 Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-23 OTHER SUPPLEMENTAL INFORMATION Independent Auditors' Report on Schedule of Federal Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Schedule of Federal Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 . Independent Auditors' Report on Internal Controls (Accounting and Administrative) - Based on a Study and Evaluation Made as a Part of an Audit of the General Purpose or Basic Financial Statements, and the Additional Tests Required by the Single Audit Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27-29 ., II' TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS (CONT'D.) DECEMBER 31. 1990 DESCRIPTION PAGE .. Independent Auditors' Report on Compliance With Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31-36 Client Responses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37-45 .. .. .. .. II' Sedore, O'Sullivan &Zetterio Certified Public Accountants. P.C INDEPENDENT AUDITORS' REPORT .. To the Supervisor and Members of the Town Board Town of Wappinger, New York .. We have audited the accompanying general purpose financial statements of the Town of Wappinger, New York, as of December 31, 1990, and for the year then ended. These general purpose financial statements are the responsibility of the Town of Wappinger, New York, management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. .. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Wappinger, New York, as of December 31, 1990, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. .. c; ~/ () ~J/~f ~ O~>; f.c. Wappingers Falls, New York September 5, 1991 1 62 East Main Street -P.O. Box 918 -Wappingers Falls NY 12590 Wappingers Falls 914-297-1111/fax 914-297-1432 - Beacon 914-831-0542/fax 914-831-5114 .. . Sedore, O'Sullivan &'Letterio Certified Public Accountants, Pc. " INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE RELATED MATTERS NOTED IN A FINANCIAL STATEMENT AUDIT CONDUCTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Supervisor and Members of the Town Board Town of Wappinger, New York ., We have audited the general purpose financial statements of the Town of Wappinger, New York, as of and for the year ended December 31, 1990, and have issued our rePOrt thereon dated September 5, 1991. We have conducted our audit in accordance with generally accepted auditing standards, Government Auditine Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and O.M.B. Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. . In planning and performing our audit of the general purpose financial statements of the Town of Wappinger, New York, for the year ended December 31, 1990, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. . The management of the Town of Wappinger, New York, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation 2 62 East Main Street. P.O. Box 918 · Wappingers Falls NY 12590 Wappingers Falls 914-297-1111/fax 914-297-1432 · Beacon 914-831-0542/fax 914-831-5114 ., ., of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: . Accountin~ Controls Cycles of the entities' activity: Treasury or financing Revenue/receipts Purchases/disbursements External financial reporting ., Financial statement captions: Cash and cash equivalents Receivables Property and equipment Payables and accrued liabilities Debt Fund balance/equity . Accounting applications: Billings Receivables Purchasing and receiving Cash disbursements Payroll Property and equipment General ledger For all of the control categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. . Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal 3 ., . control structure and its operation that we consider to be material weaknesses as defined above. However, we noted certain matters involving the internal control structure and its operation that we have reported to the management of the Town of Wappinger, New York, in the Findings and Recommendations included in this report. .. This report is intended for the information of the Supervisor, Town Board, and Management. This restriction is not intended to limit the distribution of this report, which is a matter of public record. s:-~( orJ/~~ ~ Qfr.\ f<. Wappingers Falls, New York September 5, 1991 . . . 4 . . SeLlure, O'Sullivan Letterio Certified Public Accountants. PC. . INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULA nONS BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ISSUED BY mE GAO To the Supervisor and Members of the Town Board Town of Wappinger, New York ... We have audited the general purpose financial statements of the Town of Wappinger, New York, as of and for the year ended December 31, 1990, and have issued our report thereon dated September 5, 1991. We conducted our audit in accordance with generally accepted auditing standards, Government Auditin~ Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and O.M.B. Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. . Compliance with laws, regulations, contracts and grants applicable to the Town of Wappinger, New York, is the responsibility of the Town of Wappinger, New York management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Town of Wappinger's compliance with certain provisions of laws, regulations, contracts and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. . The results of our test indicate that, with respect to the items tested, the Town of Wappinger, New York, complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to the items not tested, nothing came to our attention that caused us to believe that the Town of Wappinger, New York had not complied, in all material respects, with those provisions. 5 .. 62 East Main Street · P.O. Box 918 · Wappingers Falls NY 12590 Wappingers Falls 914-297-1111/fax 914-297-1432 · Beacon 914-831-0542/fax 914-831-5114 ., This report is intended for the information of the Supervisor, Town Board, and Management. This restriction is not intended to limit the distribution of this report, which is a matter of public record. <;,In O'j~ k~ a~~ (J.e I ., Wappingers Falls, New York September 5, 1991 ., .. ., 6 ., .. TOWN OF WAPPINGERt..,NEW YORK COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 31. 1990 7 .. . FIDUCIARY FUND TYPES ACCOUNT GROUPS GENERAL TRUST GENERAL LONG-TERM AND AGENCY FIXED ASSETS DEBT . $390,152 $ $ TOTAL (MEMORANDUM ONLy) NOTE A.13 $ 5,294,722 552,929 22,230 164,199 100,000 20,998,896 6.583.171 $6.583.171 20,998,896 6.583.171 $33.716.147 $390.152 $20.998.896 . $ $ $ 391,557 $ 138,717 1,019 491,557 164,199 967 384,015 3,171,950 6,189,000 2,614 123.000 10.667 .038 6,137 384,015 6,189,000 2,614 . 390.152 6.583.171 20,998,896 20,998,896 158,302 1.891.911 20.998.896 23.049.109 . $390.152 $20.998.896 $6.583.171 ~33.716.147 8 . TOWN OF W APPINGE!t~~JY... YORK COMBINED STATEMENTS OFREv~u~~~PENDITURES AND CHANGES IN FUND ~uITr - ALL GOVERNMENTAL FUND TYPES FOR THE YEAR ENDED DECEMBER 31. 1990 .. GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE CAPITAL NOTE F NOTE F PROJECTS REVENUES Real Property Taxes - Note A.9 $ 770,940 $1,923,119 $ Real Property Tax Items - Note A.9 45,659 Non-Property Tax Items 547,826 Departmental Income 147,876 976,856 Intergovernmental Charges 5,400 .. Uses of Money and Property - Note A.6 120,547 160,809 Licenses and Permits 69,706 Fines and Forfeitures 129,022 Sale of Property and Compensation for Loss 10,984 Miscellaneous Local Sources 6,595 212,230 25 ,080 State Aid 862,734 120,820 Federal Aid 8.280 TOTAL REVENUES 2.706.305 3.413.098 25.080 EXPENDITURES General Government Support 1,289,978 173,000 233,951 .. Public Safety 177,625 Transportation 25,478 1,122,905 Health 75,210 Economic Assistance and Opportunity 88,163 Culture and Recreation 359,855 49,616 Home and Community Service 289,843 1,156,528 586,131 Employee Benefits 221,090 145,330 Debt Service - Notes A.10, D, E and F 301.110 613.004 TOTAL EXPENDITURES 2.828.352 3.260.383 820.082 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 022.047) 152.715 (795 .002) .. OTHER FINANCING SOURCES (USES) Operating Transfers In 3,660 Operating Transfers Out (3,660) Proceeds From Obligations TOTAL OTHER FINANCING SOURCES (USES) 3.660 (3.660) EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES (118.387) 149.055 095.002) FUND EQUITY, JANUARY 1, 1990 1,913,378 89,469 (47,251) PRIOR PERIOD ADJUSTMENTS. NOTE F (674.033) ~32.983 .. ADJUSTED FUND EQUITY, JANUARY 1, 1990 1.239.345 1.622.452 (47.251) FUND EQUITY, DECEMBER 31,1990 ~1.120.958 ~1.771.507 ~(842.253) The accompanying Notes to the Financial Statements are an integral part of these statements. 9 .. ., TOTAL (MEMORANDUM ONL Y) NOTE A.13 $2,694,059 45,659 547,826 . 1,124,732 5,400 281,356 69,706 129,022 10,984 243,905 983,554 8.280 6.144.483 ., 1,696,929 177,625 1,148,383 75,210 88,163 409,471 2,032,502 366,420 914.114 6.908.817 ., (764.334) 3,660 (3,660) ., 064.334) 1,955,596 858.950 2.814.546 $2.050.212 10 ., COMBINEDT&~~bWi~ Y~~ITURES AND CHANGFS IN FUND EOUITY - BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31, 1990 GENERAL FUND - NOTE F VARIANCE - FAVORABLE AcruAL roNFA VORABLEl $ 770,940 $ 45,659 547,826 147,876 5,400 120,547 69,706 129,022 REVENUES Real Property Taxes Real Property Tax Items Non-Property Tax Items Departmental Income Intergovernmental Charges Uses of Money and Property Licenses and Permits Fines and Forfeitures Sale of Property and Compensation for Loss Miscellaneous Local Sources State Aid Federal Aid BUDGET $ 770,940 45,659 130,482 97,876 5,400 63,156 69,357 121,083 982 810,001 TOTAL REVENUES EXPENDITURES General Government Support Public Safety Transportation Health Economic Assistance and Opportunity Culture and Recreation Home and Community Service Employee Benefits Debt Service 2.114.936 1,465,999 186,488 112,471 80,350 8,767 397,569 310,061 272,121 301.110 3.134.936 TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Proceeds From Obligations 0.020.(00) 50,000 EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES FUND EQUITY, JANUARY 1,1990 BUDGETARY BASIS AS ADJUSTED FUND EQUITY, DECEMBER 31,1990 BUDGETARY BASIS RECONCILIATION TO GAAP BASIS Addition of Expenditures Not Budgeted FUND EQUITY, DECEMBER 30, 1990 $ (970.000) 6,595 862,734 2.706.305 1,289,978 177,625 25,478 75,210 88,163 359,855 289,843 221,090 301.110 2.828.352 022.047) 3,660 (118,387) 1.239.345 1,120,958 $1.120.958 . 417,344 50,000 57,391 349 7,939 . 5,613 52,733 591.369 176,021 8,863 86,993 5,140 (79,396) 37,714 20,218 51,031 . 306.584 897.953 (46,340) . $851.613 - The accompanying Notes to the Financial Statements are an integral part of these statements. 11 - ., $ (486.460) 195,629 1.622.452 1,818,081 " 46.574 ~1.771.507 , ~ 682.089 12 .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31. 1990 .. NOTE A - Summary of Accountine Policies The Town of Wappinger, New York (lithe Town") was incorporated in May 20, 1875, under the provisions of the State of New York. The Town operates under a Town Board form of government, consisting of a Supervisor and four Councilmen/woman. The Supervisor serves as the Chief Executive Officer and as the Chief Fiscal Officer of the Town. .. The Town provides the following services: highway maintenance, water, sewer, planning, zoning, building and safety inspection, lighting, and culture and recreation. The financial statements of the Town have been prepared in conformity with generally accepted accounting principles (GAAP), as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. 1. The Reporting Entity The Town, for fmancial purposes, includes all of the funds and account groups relevant to the operations of the Town of Wappinger, New York. The financial statements include organizations, functions and activities that are controlled by or dependent upon the Town. Control or dependence is determined on the basis of budget adoption, taxing authority, funding and appointment of the respective governing board. 2. Fund Accounting The accounts of the Town are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts, which are comprised of each fund's assets, liabilities, fund equity, revenues and expenditures. Government resources are allocated to and for individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into four generic fund types and two broad fund categories, as follows: .. GOVERNMENTAL FUND TYPES II' General Fund The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. 13 , ., ., Special Revenue Fund Special Revenue Fund is used to account for the proceeds of specific revenue sources (other than special assessments, expandable trust or major capital projects) that are legally restricted to expenditures for specified purposes. Capital Projects Fund This fund is used to account for financial resources to be used for the acquisition and construction of major capital facilities FIDUCIARY FUND TYPES .. Trost and Agency Fund Trust and Agency Fund is used to account for assets held by the Town in a trustee capacity, or as an agent for individuals, other governments, and/or other funds. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations. 3. Property, Plant and Equipment, and Long-Term Liabilities The accounting and reporting treatment applied to property, plant and equipment and long-term liabilities associated with a fund are determined by its measurement focus. All governmental fund types are accounted for on a spending "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Property, plant and equipment used in governmental fund type operations are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. No depreciation has been provided on such property, plant and equipment. All property, plant and equipment are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated property, plant and equipment are valued at their estimated fair value on the date donated. The Town has adopted the accounting policy of not capitalizing "infrastructure" general fixed assets (roads, bridges, curbs and gutters, streets and sidewalks, drainage system, lighting systems and similar assets) that are immovable and of value only to the Town. ., .. 14 .. .. fill Long-term liabilities expected to be financed from governmental fund types are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. The two account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with the measurement of the results of operations. Special reporting treatments are also applied to governmental fund prepaid expenses to indicate that they do not represent "available spendable resources", even though they are a component of net current assets. Such amounts are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long-Term Debt Account Group. 4. Basis of Accounting .. Basis of accounting refers to when revenues and expenditures are recognized in the accounts, and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental and expendable trust funds are accounted for using the "modified accrual basis" of accounting. Their revenues are recognized when they become measurable and available as net current assets. All major revenues are susceptible to accrual. . Expenditures are generally recognized under the "modified accrual basis" of accounting when the related fund liability is incurred. Exceptions to this general rule include: (1) accumulated unpaid vacation, sick pay, and other employee amounts which are not accrued; and (2) principal and interest on general long-term debt which is recognized when due. S. Budgets The Town employs a formal budgetary accounting system as a management tool. During the year, a budget was adopted and modified by the Town Board for the General Fund and Special Revenue Fund. However, for the Special Grant Fund, which is part of the Special Revenue Fund, and the Capital Projects Fund, no budgetary controls were established or adopted. Unused appropriations of the annually budgeted funds lapse at the end of the year. . 15 . .. 6. Cash and Investments Cash includes amounts in demand deposits as well as short-term investments. State statutes govern the investment policies of the Town. Special time deposits and certificates of deposit not covered by Federal Deposit Insurance, must be collateralized by the banking institutions with investments governed under state statutes. ., SPECIAL CAPITAL TRUST & GENERAL REVENUE PROJECTS AGENCY FUND FUND FUND FUND TOTAL Non-Interest Bearing Accounts $ 1,866 $ 882 $ $ 1,612 $ 4,360 Interest Bearing Accounts 454,790 107,198 2,485,072 388,540 3,435,600 .. U.S. Government Securities 359.034 1.495.728 1.854.762 TOTAL $815.690 $1.603.808 $2.485.072 $390.152 $5.294.722 7. Accumulated Compensated Absences The cash and investments of the Town at December 31, 1990, are as follows: .. It is the Town's policy to permit employees of the Highway Department to accumulate a limited amount of earned but unused vacation and sick leave, which will be paid to employees upon separation from the Town's service. Other Town employees accumulate unused compensated absences. However, such earned, but unused compensated absences, must be used during this period of employment with the Town. No payment will be made upon separation from the Town's service. In governmental and fiduciary funds, the cost of vacation and sick leave is recognized when payments are made to employees. A long-term liability of $211,557 of accrued vacation and sick leave at December 31, 1990, has been recorded in the General Long-Term Debt Account Group of Accounts, representing the "Town" commitment to fund such costs from future operations. 8. Pension Plans .. The Town employees are covered by the New York State Employees' Retirement System. Membership is mandatory for certain employees and optional for others. In accordance with the Retirement and Social Security Law, a participating employer cannot withhold membership in the Retirement System from any employee who desires to join. 16 .. "ill .. All general employees employed in a full-time position who commenced employment after July 26, 1976 are mandatory members. A full-time position is one in which the employment is on a 12-month per year basis with a working week of not less than 30 hours and the appointment is not temporary or limited to a 'temporary period of less than one year. Generally, all employees appointed to either a competitive class position or a non- competitive class position before July 27, 1976 are also mandatory members. Annual deficiency contributions for all employers account for less than 1/2 % of the total contributions made to the Systems. 9. Property Taxes The Town submits an approved budget to the Dutchess County Commissioner of Finance by December 5th of the previous year. The County then establishes the warrant for the year. The Town collects the taxes on behalf of the Town and County through August 31st. The Town's portion of the taxes is recognized and transferred prior to the County's portion. Therefore, the Town receives its entire tax, leaving the unpaids to the County Commissioner of Finance. ., 10. Long- Term Obligations Long-Term Debt is recognized as a liability of a governmental fund when due, or when resources have been accumulated in the debt service fund for payment early in the following year. For other long-term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is reported in the General Long-Term Debt Account Group. 11. Reserves of Fund Equity The Town records indicate that a portion of the fund equity is legally segregated for a specific future use. The following details the description and amounts of the reserves used by the Town: . ., A. General Fund Designated For Principal and Interest on Bonded Indebtedness B. Special Revenue Fund Reserve for Prepaid Expenses BALANCE AT DECEMBER 31. 1990 ~ 58.302 ~J 00 . ()()() 17 " ., 12. Allowance for Uncollectible Accounts Allowance for Uncollectible Accounts are not reflected in the Special Revenue Fund. Past due accounts after one year are placed on the county tax rolls for collection, and reimbursed to the Town as they are put on the tax rolls by the County. Total Columns on Combined Statements 13. ., Total Columns on the Combined Statements - Overview are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in fmancial position in conformity with generally accepted accounting principles. Such data is not comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. NOTE B - Interfund Receivables and Payables The following is a summary of amounts due from and due to other funds as of December 31, 1990: ., DUE TO DUE FROM General Fund $121,716 $ Capital Projects Fund 155,375 Special Revenue Fund 42,483 2,687 Trust and Agency Fund 6.137 TOTAL $164.199 $164.199 ., NOTE C - General Fixed Assets Account Group The following is a summary of changes in the General Fixed Assets Account Group for the year ended December 31, 1990: BALANCE - DECEMBER 31, BALANCE - 1989, AS DECEMBER 31, ADJUSTED ADDITIONS (DELETIONS) 1990 Land $ 741,022 $ $ $ 741,022 Buildings 15,231,900 709,602 15,941,502 Improvement Other Than Buildings 2,640,281 96,043 2,736,324 Machinery and II Equipment 1.503.012 77 .036 - 1.580.048 - TOTAL $20.116.215 $882.681 $ $20.998.896 18 ., ., The balances as of December 31, 1989 have been adjusted to include the water and sewer plants facility, previously reported as Fixed Assets in the Proprietary Fund Type. The water and sewer districts are now reported as Special Revenue Fund Types, as explamed in Note F of the Notes to the Financial Statements. ., NOTE D - Bond Anticipation Notes Payable Bond Anticipation Notes Payable are renewed annually and are not to exceed five renewals, except for water and sewer Improvements which may be renewed for the life of the improvement not to exceed twenty years. The Bond Anticipation Notes outstanding as of December 31, 1990, are as follows: AMOUNT OUTSTANDING ORIGINAL AT AMOUNT OF DECEMBER 31, ISSUE 1990 $2,192,600 $2,192,600 335,950 335,950 528,000 528,000 115.400 115.400 PURPOSE Drainage Water Sewer Drainage ISSUE DATE 8/23/90 8/23/90 8/23/90 8/15/90 INTEREST RATE 6.17% 6.17% 6.17% 6.41% .. TOTAL $3.171.950 $3.171.950 NOTE E - Serial Bonds Payable and General Lone- Tenn Debt Account Group The Serial Bonds Payable and General Long-Term Debt as of December 31, 1990, are as follows: AMOUNT OUTSTANDING ORIGlNAL AT ISSUE lNTEREST AMOUNT OF DECEMBER 31, PURPOSE DATE RATE ISSUE 1990 ., Water $ 66,000 $ 23,400 Sewer 104,000 36,000 Drainage 1.125.000 390.600 09-01-71 5.0% 1.295.000 450.000 Water 36,800 15,600 Sewer 55.200 23 .400 02-15-73 5.0% 92.000 39.000 Water 400,000 206,000 ., Sewer 500,000 251,200 Drainage 375.000 187 .800 03-01-74 5.8% 1.275.000 645.000 19 ., . NOTE E - Serial Bonds Payable and General Lone-Tenn Debt Account Group (Cont'd) AMOUNT AT ORIGINAL OUTSTANDING ISSUE INTEREST AMOUNT DECEMBER 31 DATE RATE OF ISSUE 1990 Water 2,630,000 1,375,000 . Sewer 3,005,000 1,568,000 Drainage 400.000 207.000 05-01-77 5.375% 6.035.000 3.150.000 Water 330,000 154,200 Sewer 222,000 103,700 Drainage 239.400 112.100 05-01-78 6.10% 791.400 370.000 Water 148,070 117,500 Sewer 362,000 287,250 . Town Hall 700.000 555 .250 12-01-85 7.75% 1.210.070 960.000 Water 364,500 301,500 Town Hall, Re-evaluation 377,000 110,000 Machinery and Equipment 203.000 163.500 05-01-87 6.3% 944.500 575.000 TOTALS ~11.642.970 $6.189.000 . The annual requirements to amortize bonded debt as of December 31, 1990, are as follows: YEAR ENDING DECEMBER 31. PRINCIPAL INTEREST TOTAL 1991 $ 558,000 $ 348,035 $ 906,035 1992 453,000 318,542 771,542 1993 468,000 291,910 759,910 1994 473,000 264,664 737,664 1995 473,000 237,260 710,260 1996-2000 2,260,000 776,205 3,036,205 . 200 1-2005 1.504.000 187.765 1.691.765 $6.189.000 $2.424.381 $8.613.381 20 . . NOTE F - Prior Period Adjustments and Report Classification Certain previously reported amounts have been reclassified to conform to 1990 report classifications. Adjustments to prior period Fund Equity balances are as follows: As of January 1, 1990, the Town changed the Water and Sewer Districts from an Enterprise Fund, which is a Proprietary Fund Type, to a Special Revenue Fund, which is a Governmental Fund Type. The Town is also reporting the Highway Fund as a Special Revenue Fund, instead of part of the General Fund as reported in 1989. The direct effects of these changes are as follows: 1. Special Revenue Fund Enterprise Funds Retained Earnings from Enterprise Funds as of January 1, 1990 . Add: . Highway Fund - Fund Equity as of January 1, 1990 Less: . Net conversion from Enterprise Fund to Special Revenue Fund (Property, Plant and Equipment (-) less Serial Bonds Payable previously reported in the Proprietary Fund, but reclassified as General Fixed Assets Account Group and General Long-Term Debt Account Group, respectively, for 1990 to conform with Governmental Fund Type reporting requirements) Net prior period adjustment for Special Revenue Fund 2. General Fund Less: $3,937,362 674,033 (3.078.412) ~1.532.983 Highway Fund Equity reclassified from General Fund Type to Special Revenue Fund Type $(674.033) Net prior period adjustment for the General Fund . 21 . ~(674.033) ., NOTE G - Operatine Leases The Town is committed under various leases for office equipment and communication equipment. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended December 31, 1990 amounted to $12,309. There are no future minimum lease payments due to the expiration of all leases at the end of the year. NOTE H - Capital Lease ., The Town has entered into a lease agreement as lessee for fmancing the acquisition of equipment for its highway department. This lease agreement qualifies as a capital lease for accounting purposes (bargain purchase) and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception. The equipment is recorded in the General Fixed Asset Group of Accounts at $37,800. The following is a schedule of the future minimum lease payments under this lease, and the present value of the net minimum lease payments at December 31, 1990: ". FISCAL YEAR ENDING DECEMBER 31 1991 GENERAL LONG-TERM DEBT Total Minimum Lease Payments Less: Amount Representing Interest Present Value of Future Minimum Lease Payments $2.773 2,773 159 $2.61~ ., NOTE I - Commitments and Contineent Liabilities The Town is a defendant in various lawsuits and tax certiorari cases. The outcome of these cases and lawsuits is not presently determinable. The Town has received or is owed amounts from grantor agencies, principally the Department of Housing and Urban Development. Any allowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor agency cannot be determined at this time. ., As indicated in the legal counsel representation letter, the following are the pending or threatened litigation against the Town as of December 31, 1990: 1. Action was brought by a developer seeking to reduce benefit assessments for sewer improvements levied by the Town. The matter has been settled. In addition to a reduction in the number of benefit assessments, the Town is required to pay the sum of 22 ., . NOTE I - Commitments and Contineent Liabilities (Cont'd.) $240,000, without interest, payable in four annual installments of $60,000 per year. The first installment for $60,000 was accrued as a current liability in the Special Revenue Fund at December 31, 1990. . The remaining three installments, in the amount of $180,000, have been recorded in the General Long-Term Debt Account Group. 2. A consent judgment was entered into by the Town and the Department of Environmental Conservation. Due to numerous technical difficulties, the Town of Wappinger was unable to meet the threshold dates contained in the consent judgment, and an amended consent judgment was re-negotiated and approved by both parties. The amended judgment required the Town of Wappinger, New York to pay a penalty of $40,000 for failure to comply with the terms of the original consent judgment. The amount of $40,000 has been accrued as a current liability in the Special Revenue Fund at December 31, 1990. ., 3. Through inadvertence, a developer was overcharged for its share of the operation and maintenance charges for sewer usage. The overbilling was in the approximate sum of $123,000. While no action is yet pending, the developer has demanded a refund, and it is anticipated that this sum will be refunded over three years without interest. According to the Town Attorney, it further appears that the Town has no defense to this claim. The amount of $123,000 has been accrued as a current liability in the Special Revenue Fund at December 31, 1990. NOTE .T - LeKal Compliance The Town expenditures exceeded appropriations in various areas during the year. . . 23 . .. Sedore, O'Sullivan Letterio Certified Public Accountants. Pc. .. INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE .. To the Supervisor and Members of the Town Board Town of Wappinger, New York We have audited the general purpose financial statements of the Town of Wappinger, New York, for the year ended December 31, 1990, and have issued our report thereon dated September 5, 1991. These general purpose financial statements are the responsibility of Town of Wappinger, New York, management. Our responsibility is to express an opinion on these general purposed financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and O.M.B. Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Town of Wappinger, New York, taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis, and is not a required part of the general purpose financial statements. The information in this Schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. C-' 0 (/, 11/. fj - J.;'a.,.~ rfJ^ (/ P-c. ./~( ~ jj!/fJ.~/ <dK~ Wappingers Falls, New York September 5, 1991 .. . 25 .. 62 East Main Street · P.O. Box 918 · Wappingers Falls NY 12590 Wapplngers Falls 914-297-1111/fax 914-297-1432 · Beacon 914-831-0542/fax 914-831-5114 ., TOWN OF WAPPINGER, NEW YORK SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE FOR THE YEAR ENDED DECEMBER 31. 1990 REVENUES - EXPENDITURES - CFDA DECEMBER 31, DECEMBER 31, PROGRAM NAME NUMBER GRANTOR 1990 1990 ., Revenue Sharing - Office of Federal Revenue State and Local 21.300 Sharing $ $49,616 Oddfellows Rehabilitation U.S. Department of Housing 14.218 & Urban Development 2,279 2,279 Big Sister/Big Brother U.S. Department of Housing Program 14.218 & Urban Development 6.000 6.000 TOTALS $8.279 $57 .895 ., ., .. 26 .. '" Sedore, O'Sullivan Letterio Certified Public Accountants. Pc. t#/I INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROLS (AC,COUNTING AND ADMINISTRATIVE) - BASED ON A STUDY AND EVALUATION MADE AS A PART OF AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS AND THE ADDITIONAL TESTS REOUlRED BY THE SINGLE AUDIT ACT "'" To the Supervisor and Members of the Town Board Town of Wappinger, New York We have audited the general purpose financial statements of the Town of Wappinger, New York, for the year ended December 31, 1990, and have issued our report thereon dated September 5, 1991. t#/I As part of our audit, we made a study and evaluation of the internal control systems, including applicable internal administrative controls, used in administering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, Government Auditine Standards, issued by the Comptroller General of the United States, the Single Audit Act of 1984, and the provisions of OMB Circular A-128, "Audits of State and Local Governments." For the purpose of this report, we have classified the significant internal accounting and administrative controls used in administering federal financial assistance programs in the following categories: Accounting Controls Cycles of the entities' activity: Treasury or financing Revenue/receipts Purchases/disbursements External financial reporting Financial statement captions: Cash and cash equivalents Receivables Property and equipment Payables and accrued liabilities Debt Fund balance t#/I 27 . 62 East Main Street · P.O. Box 918 · Wappingers Falls NY 12590 Wappingers Falls 914-297-1111/fax 914-297-1432 · Beacon 914-831-0542/fax 914-831-5114 ., ., Accounting applications: Billings Receivables Cash receipts Purchasing and receiving Accounts payable Cash disbursements Payroll Property and equipment General Ledger Administrative Controls General Requirements: Political activity Davis-Bacon Act Civil rights Cash management Federal financial reports Specific Requirements: Types of services allowed or unallowed Eligibility Monitoring subrecipients Reporting The management of the Town of Wappinger, New York, is responsible for establishing and maintaining internal control systems used in administering federal financial assistance programs. In fulfilling that responsibility, estimates and judgements by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, maintained, and fairly disclosed in reports. Because of inherent limitations in any system of internal accounting and administrative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. .. ., .. Our study included all of the applicable control categories listed in the first paragraph. During the year ended December 31, 1990, the Town of Wappinger, New York, had no major federal financial assistance programs, and expended 100% of its total Federal Financial Assistance under the following nonmajor federal fmancial assistance program: Community Development Block Grant Entitlement Program and Federal Revenue Sharing Program. With respect to internal control systems used in administering these nonmajor federal financial assistance programs, our study and evaluation included considering the types 28 ., . of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. . With respect to the internal control systems used solely in administering the nonmajor federal financial assistance programs of the Town of Wappinger, New York, our study and evaluation was limited to a preliminary review of the systems to obtain an understanding of the control environment and the flow of transactions throughout the accounting system. Our study and evaluation of the internal control systems used solely in administering this nonmajor federal financial assistance program of the Town of Wappinger, New York, did not extend beyond this preliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance program of the Town of Wappinger, New York. Accordingly, we do not express an opinion on the internal control systems used in administering the nonmajor federal financial assistance program of the Town of Wappinger, New York. Also, our audit, made in accordance with the standards mentioned in the first paragraph, would not necessarily disclose material weaknesses in the internal control systems used solely in administering the nonmajor federal financial assistance program. However, our study and evaluation and our audit disclosed the following conditions that we believe result in more than a relatively low risk that errors or irregularities in amounts that would be material to a federal financial assistance program may occur and not be detected within a timely period: (1) The Town failed to monitor the activities of the sub-recipients. (2) The Town failed to use the Federal Revenue Sharing funds within 24 months after the end of the entitlement period. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in (1) our audit of the 1990 general purpose financial statements, and (2) our audit and review of the Town of Wappinger, New York, compliance with laws and regulations, noncompliance with which we believe could have a material effect on the allowability of program expenditures for the nonmajor federal financial assistance program. This report does not affect our reports on the general purpose financial statements, and on the Town of Wappinger, New York, compliance with laws and regulations dated September 5, 1991. . . ill' This report is intended for the information of the Supervisor, Town Board and Management. This restriction is not intended to limit the distribution of this report, which is a matter of public rec. ord. i 0" J .IL . / c:; ~ O~~ ~ (j)~ ~( ~.C . Wappingers Falls, New York September 5, 1991 29 . . Sedore, O'Sullivan Letterio Certified Public Accountants. PC .. INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS . To the Supervisor and Members of the Town Board Town of Wappinger, New York In connection with our audit of the 1990 general purpose financial statements of the Town of Wappinger, New York, and with our study and evaluation of the Town of Wappinger, New York, internal control systems used to administer federal financial assistance programs, as required by Office of Management and Budget Circular A-128, "Audits of State and Local Governments," we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended December 31, 1990. As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed, and the eligibilities that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Town of Wappinger, New York, compliance with these requirements. Accordingly, we do not express such an opinion. . With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Town of Wappinger, New York had not complied, in all material respects, with those requirements. This report is intended for the information of the Supervisor, Town Board, and Management. This restriction is not intended to limit the distribution of this report, which is a matter of public record. .. ~~!O~~1(~(~~(p~. Wappingers Falls, New York September 5, 1991 30 . 62 East Main Street · P.O. Box 918 · Wappingers Falls NY 12590 Wappingers Falls 914-297-1111/fax 914-297-1432 · Beacon 914-831-0542/fax 914-831-5114 .. TOWN OF WAPPINGER, NEW YORK FINDINGS AND RECOMMENDATIONS Findine 1: No updated General Ledger for the year ended December 31, 1990. .. Cause: Insufficient year-end procedures for issuance of all reports and ledgers prior to close year-end. General Ledger does not agree with Trial Balances. Effect: Recommendation: Written accounting procedures should be developed and implemented for all year-end closing procedures. Findine 2: ., Interfund Receivables and Payables not in balance as of December 31, 1990. Cause: No reconciliation is being done by the accounting department for the Interfund Receivables and Payables. Improper financial reporting. Effect: Recommendation: Establish procedures for reviewing Interfund Receivables and Payables transactions and reconcile any differences encountered on a monthly basis. .. Findine 3: Interfund Revenues and Expenditures not in balance as of December 31, 1990. Cause: No reconciliation is being done by the accounting department for the Interfund Revenues and Expenditures. Improper financial reporting. Effect: .. Recommendation: Establish procedures for reviewing the Interfund Revenues and Expenditures transactions, and reconcile any differences encountered on a monthly basis. 31 .. .. Fin dine 4: .. .. .. , Numerous entries were posted directly to Fund Balance, with insufficient or no explanation, as follows: Water Districts: Wawineers Park Water: A - Due From Other Funds improperly recorded directly through Fund Balance causing as overstatement of Fund Balance within the Wappingers Park Water District and Interfund Receivables and Payable to be out of balance. B - The refund to Wappingers Park Water in the amount of $74,204.20 for Capital Improvements was financed in 1990 through issuance of Bond Anticipation Note. This Capital Improvement was originally paid by the operating water district. When refund was made to the operating district and incorrect entry directly to Fund Balance was made to record the refund. Fleetwood Water: A - The repayment to Fleetwood Water in the amount of $99,500 for Capital Improvements was financed in 1990 through issuance of Bond Anticipation Note. This Capital Improvement was originally paid and expensed by the operating water district. When refund was made to the Operating District, the entry was made incorrectly to the Fund Balance, instead of through the current period operations. Central Wappineer Water: A - Accrued Accounts Payable for the year of 1989 were posted to the Expenditures Account in 1990. At year end the outstanding balance within the Accounts Payable was adjusted directly to Fund Balance. This caused an overstatement of the expenditure line item and an improper entry to Fund Balance. B - Adjustment of overstated water rents receivable in the amount of $17,935.29 was posted directly to Fund Balance. This could be the result of overstatement of water sales or incorrect posting of receivables. Tall Trees Water: A - Adjustment of understated water rents receivable in the amount of $24,761.13 was posted directly to Fund Balance. This could be the result of understatement of water sale or incorrect posting of receivables. 32 .. Oakwood: .. A - Accrued accounts payable for the year of 1989 were posted to the expenditure accounts in 1990. At year end, the outstanding balance within the Accounts Payable was adjusted directly to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. Sewer Districts: .. SI #1 A - Accrued Accounts Payable, for the year of 1989 in the amount of $23,898.55, were posted to the Expenditure Accounts in 1990. At year end the outstanding balance within the Accounts Payable was adjusted directly to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. Fleetwood Sewer: A - The repayment to Fleetwood Sewer in the amount of $33,732 for Capital Improvements was financed in 1990 through the issuance of a Bond Anticipation Note. This Capital Improvement was originally paid and expensed by the Operating Sewer District. When repayment was made to the Operating District, the entry was made incorrectly to the Fund Balance, instead of through the current period operations. Rockingham Sewer: A - Sewer rents revenue were adjusted by an entry of $18,796.63 directly to Fund Balance. This could be the result of improper revenue and or receivable classification. . B - Accrued Accounts Payable for the year of 1989 in the amount of $16,415.90 were posted to the expenditure accounts in 1990. At year end the outstanding balance within the Accounts Payable was adjusted to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. . C - The cash accounting balances for the Rockingham Sewer District had $5,071.45 more than shown by the bank. The unreconciled difference was adjusted directly to Fund Balance. 33 . .. Wildwood Sewer: .. A - Adjustment of overstated sewer rents receivable in the amount of $3,826.98 was posted directly to Fund Balance. This could be the result of overstatement of sewer rents revenue or incorrect posting of receivables. B - Accrued Accounts Payable for the year of 1989 in the amount of $8,876.56 were posted to the expenditure accounts in 1990. At year end, the outstanding balance within the Accounts Payable was adjusted to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. .. Hiehway Fund: A - Accrued Accounts Payable for the year of 1989 in the amount of $17,985.35 were posted to the expenditure accounts in 1990. At year end the outstanding balance within the Accounts Payable was adjusted to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. Cause: Lack of understanding of basic accounting principles and of proper accountability within the governmental accounting system. Inadequate training of personnel. Establishment of an accounting manual with detailed accounting procedures. Evaluate the competency of employees and levels of ability. Provide training in municipal accounting to all accounting employees. Recommendation: ... Findine 5: Community Development revenue accrual of $6,305.54 for 1989 was recorded in the Federal Revenue Sharing Fund as revenue when received in 1990. Cause: No review of receipt to establish if it is a current year revenue or receivable. Effect: Overstatement of Federal Revenue Sharing. . Recommendation: Establish procedures for recording receipts by reviewing period in which revenue is to be recognized. 34 . - Findinll 6: The Town has not established policies for monitoring pass-through funds from HUD to Oddfellows Rehabilitation and Big Sister/Big Brother. Effect: ., Potential liability to HUD for monies received. No policies established for monitoring use of money by Oddfellows Rehabilitation and Big Sister/Big Brother. Recommendation: Establish procedures for monitoring activities of Oddfellows Rehabilitation and Big Sister/Big Brother using Town pass-through funds. Cause: Findine 7: Accounts Payable accruals overstated in the Highway Fund by $66,229.94 for year ended 1990. - Cause: Accruals for Accounts Payable were based on estimated amounts without regard to the actual commitments of the Town at year end. Overstatement of liability and expenditure. Understatement of available Fund Balances. Effect: Recommendation: Establish procedures for recording Accounts Payable amounts which reflect actual amounts owed by the municipality at year end, and not unused amounts left in the budget. Findine 8: ., Cause: Debt issues were not properly recorded by the Town Clerk in the Indebtedness Register book. Failure to comply with Sec. 163.00 of the Local Finance Law. Recommendation: Establish procedures to insure proper recording of Town indebtedness. ., 35 II' -- Findin29: Cause: Account #591-9??oo165 in the name of the Town was not recorded as part of the assets in any of the Town's various funds. No proper reconciliation of all bank accounts with accounting records. .. Effect: Understatement of assets, possible misappropriation of funds. Recommendation: Establish procedures to insure that all funds in the name of the Town be properly recorded. Findine 10: . Our test work of disbursements disclosed the following: 1. Nine vouchers without department head approval. 2. Four vouchers processed; not signed by claimant. 3. No approval for payments other than Comptroller's Office. Recommendation: Policies be established for payment of vouchers only after properly executed voucher and approvals, accompanied by all supporting documentation. . .. 36 ., .. CONSTANCE 0 SMITH SUPERVISOR TELEPHONE: (914) 297-2744 FAX: (914) 297-4558 , TOWN OF WAPPINGER SUPERVISOR'S OFFICE 20 MIDDLEBUSH ROAD P.O. BOX 324 WAPPINGERS FALLS, NY 12590-0324 November 18, 1991 .. MEMO TO: FROM: RE: Finding 1: .. Response: .. Findin(jJ 2: .. Response: .. Sedore, O'Sullivan/& Letterio // (\ ~l\ Constance O. smifh \\...; t / AUDIT RESPONSE '''----~_::...../ No updated General Ledger for the year ended December 31, 1990. Written accounting procedures were developed and in place at the time of the audit. Both the state auditors and the Town were aware of the problem which was caused by a new software program which the Town had not completely mastered, therefore, we were not able to implement all procedures at 1990 year end, due to some software program glitzes. We could have restored the backup tape to have the general ledger agree with trial balance. This, however, would have caused the whole system to be down for about five business days. Current applications would have been behind. The same condition existed 1989 year end due to software problem at that time. The Town has now mastered the new software and in the future the general ledger and trial balance will agree. Interfund Receivables and Payables not in balance as of December 31, 1990. Since we are not sure what this finding eludes, we cannot give an answer. However, if it is directed toward Wappinger Park Water District, we are aware of it and we will correct the error. An error was made and $3,499.88 was booked to Wappinger Park Water District, however, it was actually due to B Fund. -37- . Audit Response page 2 Finding 3: Response: . Findin<J 4: A: . Response: A: . Findin<J: B: Response: B: . . Interfund Revenues and Expenditures not in balance as of December 31, 1990. This was a misc1assification and we have reclassified and corrected error. Numerous entries were posted directly to Fund Balance, with insufficient or no explanation. Wappingers Park Water: Due from other funds improperly recorded directly through Fund Balance causing an overstatement of Fund Balance within the Wappingers Park Water District and Inter- fund Receivables and Payable to be out of balance. An error was made and $3,499.88 was booked to Wappinger Park Water District. However, it was actually due to B Fund. The refund to Wappingers Park Water in the amount of $74,204.20 for Capital Improvement was financed in 1990 through issuance of Bond Anticipation Note. This Capital Improvement was originally paid by the operating water district. When refund was made to the operating district and incorrect entry directly to Fund Balance was made to record the refund. This Capital Purchase was never booked in Wappinger Park Water. Therefore, the entry to Capital Wappinger Park was done. Never should have been in fund balance to begin with. -38- . Audit Response page 3 . Findinq: A: .. Response: A: Findin9: A: . Response: A: Findinq: B: . Response: B: .. Fleetwood Water: The repayment to Fleetwood Water in the amount of $99,500 for Capital Improvements was financed in 1990 through issuance of Bond Anticipation Note. This Capital Improvement was originally paid and expensed by the operating water district. When refund was made to the Operating District, the entry was made incorrectly to the Fund Balance, instead of through the current period operations. We are in accordance with this statement however, in the future we will use the proper method. Central Wappinger Water: Accrued Accounts Payable for the year 1989 were posted to the Expenditures Account in 1990. At year end the outstanding balance within the Accounts Payable was adjusted directly to Fund Balance. This caused an overstatement of the expenditure line item and an improper entry to Fund Balance. $9659.07 booked to Accounts Payable in 1989 per journal entry received from single audit accounting firm. $9659.07 booked to Accounts Payable and Fund Balance per journal entry from single audit accounting firm reversing entries never given to Town. Adjustment of overstated water rents receivable in the amount of $17,935.29 was posted directly to Fund Balance. This could be the result of overstatement of water sales or incorrect posting of receivables. Beginning Accounts Receivable incorrect. We could only post to Fund Balance. -39- . Audit Response page 4 . Finding: A: Response: A: . Finding: A: Response: A: . Finding: A: . Response: A: . Tall Trees: Adjustment of understated water rents receivable in the amount of $24,761.13 was posted directly to Fund Balance. This could be the result of understatement of water sale or incorrect posting of receivables. Accounts Receivable was incorrectly booked as a negative $13,501.40. In order to bring Accounts Receivable to proper balance journal entry was necessary. Oakwood: Accrued accounts payable for the year of 1989 were posted to the expenditure accounts in 1990. At year end, the outstanding balance within the Accounts Payable was adjusted directly to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. $1975.00 adjusted to Accounts Payable 1989 per single audit accounting firm. $1975.00 adjusted to Accounts Payable and 1990 Fund balance per single audit accounting firm. Reversing entries never given to Town by single audit accounting firm. Sewer Districts: SI #1 Accrued Accounts Payable, for the year 1989 in the amount of $23,898.55, were posted to the Expenditure Accounts in 1990. At year end the outstanding balance within the Accounts Payable was adjusted directly to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. $23,731.69 adjusted to Accounts Payable per single audit accounting firm. $23,731.69 adjusted to Accounts Receivable and 1990 Fund Balance per single audit accounting firm. Reversing entries to 1990 never given to Town. -40- . Audit Response page 5 Findin~: . A: Response: A: . . Findin~: A: . Response: A: . Fleetwood Sewer: The repayment to Fleetwood Sewer in the amount of S33,732 for Capital Improvements was financed in 1990 through the issuance of a Bond Anticipation Note. This Capital Improvement was originally paid and expensed by the Operating Sewer District. When repayment was made to the Operating District, the entry was made incorrectly to the Fund Balance, instead of through the current operations. S33,732 due to SI #1 was on books at year end 1989. This improvement was done in 1984 and 1985. Bonding was taken out in 1986 for S22,000 to pay back SI #1, this payback never occured. In 1989, the Town was audited for year 1987 by New York State. The New York State Auditor and the single audit accounting firm determined that the Capital Project was not done and S22,000 was returned to district taxpayers by reducing amount to be raised by taxes for bonded indebtedness. The due to remained on the books. In 1990, Bonding was again taken out and finally SI #1 was repaid. The obligation of payback should not have been a district expense but a Capital expense. Rockingham Sewer: Sewer rents revenue were adjusted by an entry of S18,796.63 directly to Fund Balance. This could be the result of improper revenue and or receivable classification. Yes, we are aware of this and now we do accounts receivable reconciliation on a monthly basis as of Janaury 1991. -41- . Audit Response page 6 Finding: B: . Response: B: Findin~: c: . Response: c: Finding: A: . Response: A: Finding: B: . Response: B: . Accrued Accounts Payable for the year of 1989 in the amount of $16,415.90 were posted to the expenditure accounts in 1990. At year end the outstanding balance within the Accounts Payable was adjusted to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. Same situation as SI #1. The cash accounting balances for the Rockingham Sewer District had $5,071.45 more than shown by the bank. The unreconciled difference was adjusted directly to Fund Balance. $5071.45 difference to cash was caused by a systems error (Executive Systems). Journal entry was made to Fund Balance to correct. Wildwood Sewer: Adjustment of overstated sewer rents receivable in the amount of $3,826.98 was posted directly to Fund Balance. This could be the result of overstatement of sewer rent revenue or incorrect posting of receivables. Same as Rockingham Sewer A Response. Accrued Accounts Payable for the year 1989 in the amount of $8,876.56 were posted to the expenditure accounts in 1990. At year end, the outstanding balance within the Accounts Payable was adjusted to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. $5,917.84 posted to Accounts Payable 1989 per single audit accounting firm. $5,917.84 adjusted to Accounts Payable 1989 per single audit accounting firm. $5,176.51 adjusted to Accounts Payable and 1990 Fund Balance per single audit -42- . Audit Response page 7 . Findin9: A: . Response: A: Findin9 5: . Response: . Findin9 6: . accounting firm. No reversing entries received by Town. $2217.79 system error. $8876.96 journal entry was made to Fund Balance to correct. Highway Fund: Accrued Accounts Payable for the year of 1989 in the amount of $17,985.35 were posted to the expenditure accounts in 1990. At year end the outstanding balance within the Accounts Payable was adjusted to Fund Balance. This caused an overstatement of the appropriate expenditure line item and an improper entry to Fund Balance. $17,985.35 posted to Accounts Payable 1989 per single audit accounting firm. $17,985.35 posted to Accounts Payable and 1990 Fund Balance per single audit accounting firm. No reversing entries received by Town. $17,9895.35 journal entry was made to Fund Balance to correct. Community Development revenue accrual of $6,305.54 for 1989 was recorded in the Federal Revenue Sharing Fund as revenue when received in 1990. All CD Funds were closed out per single audit accounting firm in 1989. $88,000 remained with Duthcess County Planning Department---request for payment for $6305.54 was made in 1990 for aquifer grant. Monies was received May 22, 1990. There was no place to show this revenue. Our single audit accounting firm told us to deposit it into Federal Revenue Sharing until it could be moved. Journal entry transferred monies to B Fund where it belonged. This did not occur at year end, it was previously cleared up. The Town has not established policies for monitoring pass-through funds from HUD to Oddfellows Rehabilitation and Big Sister/ Big Brother. -43- ., Audit Response page 8 Response: ., Findin<;1 7: Response: Findin<;1 8: ., Response: Findin<;1 9: Response: ., Findin<J 10: ., Response: ., The Town has requested audit from Oddfellows Rehabilitation and Big Sister/Big Brother. We are presently awaiting the audit reports. Accounts Payable accruals overstated in the Highway Fund by $66,229.94 for year ended 1990. This statement is correct. The Town has implemented better controls. Debt issues were not properly recorded by Town Clerk in the Indebtedness Register book. Debt issues were recorded. The record book in comptrollers offices was up to date, however, the Town Clerk has now also updated her records. Account #591-90000165 in the name of the Town was not recorded as part of the assets in any of the Town's various funds. This statement is correct. The account was closed out in 1989 and interest was not taken into account. This administration has corrected previous administrations errors. Our test work of disbursements disclosed the following: 1. Nine vouchers without department head approval. 2. Four vouchers processed; not signed by claimant. 3. No approval for payments other than Comptroller's Office. This administration has created new policies and no voucher will be found unsigned in the future. -44- " Audit Response page 9 .. Many of the problems occuring are the result of many errors by the previous administration. This administration has acted on all problems as rapidly as possible and we feel that all corrections have been done. Our new software program, which was recommended by our single audit accounting firm, should help us achieve much better results. COS:dlh .. . .. -45- .. , , AC 2612 (Rev, 1/69) 35 .. ::.StatA A' "Ia'.. y<),1k "'" '8 If' rE:m::ft! :ftta1 - ~mJ:fClftiif.- .' ,._.~... e.... .fL,. '. ' NOTICE NOTICE IS HEREBY GIVEN THAT THE FISCAL AFFAIRS OF THE TOWN OF WAPPINGER FOR THE PERIOD BEGINNING ON JANUARY 1, 1990 AND ENDING ON DECEMBER 31, 1990 HAVE BEEN EXAMINED BY THE OFFICE OF THE STATE COMPTROLLER AND THAT THE REPORT OF EXAMINATION PERFORMED BY THE OFFICE OF THE STATE COMPTROLLER HAS BEEN FILED IN MY OFFICE WHERE IT IS AVAILABLE AS A PUBLIC RECORD FOR INSPECTION BY ALL INTERESTED PERSONS. PURSUANT TO SECTION THIRTY.FIVE OF THE GENERAL MUNICIPAL LAW, THE GOVERNING BOARD OF THE TOWN OF WAPPINGER MAY IN ITS DISCRETION, PREPARE A WRITTEN RESPONSE TO THE REPORT OF EXAMINATION PERFORMED BY THE OFFICE OF THE STATE COMPTROLLER AND FILE ANY SUCH RESPONSE IN MY OFFICE AS A PUBLIC RECORD FOR INSPECITON BY ALL INTERESTED PERSONS NOT LATER THAN 0t.iJ&li: &Aim fW Wbdt(illlbcftiiffWS':lN~Ii':lidl iU1Ci& i\Mfa NiCWiIi 6.~ lIIC1iJClllllflR0JAlIXf'QllOAtllq. FEBRUARY 25, 1992 November 15, 1991 (NAME) ?Qcuw \-\ ~MJ;lJ-- ELAINE H. SNOWDEN (TITLE) Town Clerk-Town of Wappinger ~ ,., "'t' , " .< ... ,;, ')" . ,~', ; , ~- . "" ~. ", ;1 .. . PLEASE TAKE NOTICE that the Town of Wappinger Supervisor's Annual Financial Report for the year 1991 has been completed and filed in the office of the Town Clerk of the Town of Wappinger on the 24th day of February, 1992, and is available for public inspection and copying during normal business hours between the hours of 8:30 A.M. and 4:00 P.M., Monday through Friday in said Town Clerk's Office. Dated at: Wappingers Falls, NY February 24, 1992 Elaine H. Snowden Town Clerk Town of Wappinger