ALBANY — The Albany County Comptroller has issued a highly critical audit of how the office of District Attorney P. David Soares handled its petty cash fund.

Comptroller Michael F. Conners said that by statute, the petty cash fund is only allowed to have $5,000 in it, but the audit found the account had a total of $351,000 after money was deposited there that was intended to be used for restitution to victims in a recent criminal case. The victims were also overpaid by a total of $804, the audit found.

The petty cash fund is handled by Richard Arthur, the district attorney’s director of administration, who was previously spokesman for Soares.

“The Director of Administration has demonstrated a total disregard for fiscal management, a total lack of compliance with county guidelines for the use of the petty cash fund and exhibits a sense of entitlement that is dangerous to the fiscal matters of the District Attorney’s office,” Conners wrote.

The audit recommends that the Albany County Legislature suspend the petty cash account for the office until “someone capable of administering this account is in place.”

In a statement released on Thursday, Soares, who is running unopposed for re-election, said he takes full responsibility for the inner workings of the office and added departmental funds are being used appropriately.

“I have reviewed the audit of the petty cash account done by the County Comptroller and agree with some of his findings as they relate to process and accounting issues,” Soares said. “Although I respect the Comptroller, there are also some conclusions with which I emphatically disagree, particularly those which might lead to the conclusion that funds have been misused or misappropriated in any manner.”

Conners said that in more than 130 petty cash audits during the past 12 years, his office had “never encountered the problems with basic bookkeeping, accounting and petty cash account management that the Director of Administration for the DA presents.”

The audit was done on May 8 when Conners met with Arthur and requested books and comments. Conners said Arthur was unable to produce all the paperwork necessary to conduct the petty cash audit. After two days they were able to piece together a partial audit.

Soares said it’s his responsibility to ensure the public safety of Albany County and ensure the integrity of the fiscal controls within the office. “I am in the process of convening a panel of financial experts to review the fiscal dealing of the Office of the Albany County District Attorney and will report those findings to the people of Albany County when they become available to me.”