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State: Town of Amsterdam financial records poorly kept

Thursday, April 11, 2013
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— The town of Amsterdam has some problems with its bookkeeping, according to the Office of the State Comptroller.

The office recently sent accountants to Amsterdam to conduct a municipal audit, finding financial discrepancies and flawed records but no missing or suspicious funds.

“We’re working with the Comptroller’s Office and a software company,” said Amsterdam Town Supervisor Tom DiMezza. “We’ll have this squared away very soon.”

According to the audit report, “[DiMezza] does not maintain timely or accurate accounting records for the town,” which led to a number of problems.

The town manages its roughly $3.7 million budget through 12 bank accounts, which the report said should be managed and balanced separately.

“[Instead] the majority of the town’s funds are commingled into one checking account,” the report said, “and bank reconciliations are prepared by the bookkeeper to balance with the town’s cumulative cash balance versus the cash attributable to each individual fund.”

As a result, DiMezza said the town’s various accounts have been out of balance since he started in 2000.

Each year while preparing the annual financial update document required by the state Comptroller’s Office, he tweaked the accounts to balance everything out. When the auditors arrived they found discrepancies between those annual tweaked reports and the town’s actual records.

For example, DiMezza’s 2010 report claimed $120,000 was in the town’s general fund when there was really only $54,000. There were similar discrepancies between bank and town records.

Towns using conventional accounting practices close revenues and expenditures to balance at the end of each fiscal year so the next year starts fresh. Because of the largely undocumented flow of money between accounts, DiMezza and the two bookkeepers he oversees couldn’t wrap up the fiscal year in a conventional manner.

“The supervisor prepared journal entries to enable the individual funds to balance,” the report said, “but not based on any sound accounting practices or evidence of errors identified that warranted adjustments.”

All the discrepancies may sound grim, but according to DiMezza the audit was actually a “very small deal.”

When auditors totaled all town expenses, revenues and account balances, everything added up. Nothing was missing.

“Cash equals cash in the end,’ DiMezza said. “None of the public’s money is missing.”

Even so, the audit recommended better records be kept of each account and released both to the Amsterdam Town Board and the Comptroller’s Office.

DiMezza said Thursday that he’s working with Enhanced Business Systems, a financial software company in Schenectady, to iron out the bookkeeping system. “Most of the problems in the audit were caused by user error,” he said, explaining that he and his staff didn’t use their program correctly.

 
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