The Village of Lindenhurst is being criticized by the state comptroller for not having better oversight of how they process claims for payment.
The audit, released by State Comptroller Thomas DiNapoli, looked at the village’s claims process for the period of March 1, 2015, through May 31, 2016.
The report, accepted by the village last week, describes how under state village law, all claims must be audited by the village board, a board-appointed claims auditor or a board-appointed committee. A “proper” audit, the report notes, ensures that claims are itemized with an invoice or receipt attached as well as supporting documentation.
During the period examined, the village paid 5,987 claims, totaling $12,315,993. The village initiates claims through department heads, who submit a requisition form to the purchasing agent, who then converts the requisition to a purchase order.
Once a purchase is made, the claim and any supporting documents are given to Deputy Treasurer Louise Schrader, who then prints the checks and a related abstract, or summary. Claims are then audited and approved by Clerk-Treasurer Shawn Cullinane, who also signs the disbursement checks to pay the claims. The village board of trustees then reviews the abstract and gives approval through a resolution vote.
The audit notes that while the board “generally” approved claim abstracts, it did not do an “effective claims audit or establish an adequate process to ensure that transactions were properly authorized and approved or that claims were for proper Village purposes.”
Further, the report stated, the board delegating claims auditing to Cullinane is “inappropriate and inconsistent” with state village law. “Internal controls are compromised when the same person who audits and approves the claims for payment also signs the checks to pay those claims,” it stated.
In a review of 30 claims, the state found that there were no approved requisitions attached to 18 of the claims totaling $44,152, and that contract rates, quotes or both were missing for 15 of the claims totaling $37,702. The report states that all of the claims reviewed “appeared to be reasonable and legitimate.”
The state recommended that the board ensure all claims have proper supporting documentation and either audit all claims or hire a person or create a committee to do so.
In a written response to the audit, Mayor Tom Brennan stated that the village would take the state’s findings and recommendations under consideration.
Cullinane said he was happy with the audit’s findings that in general “we are doing things correctly” and there’s “nothing major out of place or any fraud or anything like that.”