Cusack & CoMPaNy Certified Public Accountants LLC 7 Anvorr Pat BOURvana Larne, New Yon 12110 (S18) 786-3550 Fax (518) 786-1538 E-Maa, ADDRES: INFO@ CusacKcPA.Com Josemn D. Bartacus, CPA 7 PwH CARA OM . a. Pa A Goon, CP (518) 664-7063 Tasers M. Cusack, CPA ‘Fax (518) 541-3083 Jon A. Cuscone, CPA raat Oy ‘Wenoy M. Laine, CPA fg -Awenican InsTTuTE OF usa Mt, Gach CPA Catv (Cerrina Punuc Accouvravrs Jason D. Matas, CPA a0 Jon J. Tamowsts, CPA New Youx State Soarry of ‘Tamience P. Guscouy FEB 17 201 (Cann Pusuic Accouranrs os Jor A. Coavo, CPA, oF Course February 14, 2011 TOWN OF NORTH, TOWN CLERK Town Board Town of North Greenbush, New York 2 Douglas Street * ‘Wynantskill, New York 12198 ‘We were engaged to perform an agreed-upon-procedures report for the Town of North Greenbush. As part of that engagement we met with various Town employees on February 8, 2011 to clarify our needs in performing the engagement and to perform a preliminary assessment of the status of the records. We noted the following: It appears that the last Town bank reconciliations were done as of July 31, 2010, leaving the past six months unreconciled. We were told that it was the Comptroller's practice to reconcile cash on an annual basis, In this past year we have a client whose checks were duplicated and cashed. Because of a timely bank review and reconciliation process, the fraud was discovered and the bank notified in a timely manner. The bank, afier some time, reimbursed our client in full. Should the same situation occur in the Town, it may not be discovered in a timely manner and the bank may not be so willing to “contribute” to the Town’s negligence. Over one year ago the Duanesburg School District lost 3 million to fraud. Through timely bank review and reconciliation they recovered 2.5 million but ultimately lost $500,000. Should a similar situation occur at the Town, it may not be discovered for some time, but could be devastating, It is imperative that timely and accurate bank reconciliations be performed monthly, the potential negative implications could literally wipe-out the Town. We recommend that bank reconciliations be performed monthly as soon after receipt of bank statements as possible. Additionally, the bank reconciliation should be reviewed and initiated by someone independent of the process, possibly the Town Supervisor.‘Bank Reconciliation Format -the bank reconciliation format sed (so artachment A) was not computerized and WSs aifficult to determine the accuracy of the reconciliation. _Werecommenc that a computerized (even tits Excel) reconciliation format thats easilyreviewable ‘be developed and utilized: ‘Unauthorized Bank Account: appears that a bank aecount with Pioneer Commercial Bank was opened during the year (at uly 31,2010 the account had a belanct io §3,073,487), but the Town Board wi never notified and Jnorefore never formally approves ‘opening the account "additionally, when the account wa opened the Comptroller was the sole Mathorized signer. Several Years a80 © local BOCES had a similar Miuaation in Which the Comptroller ed the ability to open bank accounts ‘without the Board’s howiedge, Tt was later discovered he embezzled approximately 4 million dollars. {We recommend that a policy be developed and implemented whereby ‘every bank acount that is pened or closed during the Year ‘pe approved by the Town Board. Reconciliation of Detail Accounts Payable to Control: We requested the accounts payable 800 auNovernber 30,2011 (the last period closed in the general Jedger) and the balance in the spate} account. ‘The total of the Aging Should agree to the control ecounts. We found the followings ralance per the General Ledger WC 600 Accounts Payable $4,691,461 * Palance per the Accounts Payable ASINE 59,827 ‘Unreconciled $as3L.034 We recommend that a policy be developed and implemented 10 reconciled accounts payable on & monthly basis. Reconciliation of Fund Balance “Tne opening fund balance perthe: genera ledger does not agree © he Annual Update document filed with the State as follows: Per Per State General General Fund gs a7 430) $ (90,743), Highway 392,645 279,408 ‘We recommend that opening fund tpatance be reconciled 10 the final 2009 balances and that the appropriate adjustments be recorded.009 Annual Update en IMappears that although the 2009 Annual Update Document has been submitted to New York State, the report has not yet been accepted. We recommend that the State’s issue be resolved and the report finalized. Inthe shor time we spent atthe Town there were numerous other potential issues identified but what became apparent was that to address the critical issues immediately and address all other issues ultimately there needs to be a Town Comptroller in place as soon as possible, Should you have any questions or would like to discuss this letter, please don’t hesitate 10 call us. Very truly yours, Cusack & Company, CPA’S LLC FE iil &.Gafptr Kenneth B. Claflin, CPA KBC/dmj