An independent audit of Northport's accounting policies found several deficiencies, which village officials said they are already correcting.
The village sought the audit as the final stage of improvements made since 2009, when a former village treasurer wrote herself checks totaling nearly $150,000 and claimed it was overtime, said Henry Tobin, deputy mayor and commissioner of finance.
"That led us to review all the policies that we had concerning money," Tobin said. "The village had been using the same system for years. It was an older system, perfectly legal, but hardly state of the art."
The audit, conducted by Hauppauge-based Albrecht, Viggiano, Zureck & Company PC, focused on rooting out any remaining deficiencies that put Northport at risk financially.
It identified three weaknesses, including that the village has not sufficiently tracked its capital assets and related factors such as depreciation. Assets include properties and vehicles the village owns.
According to auditors, minimal tracking can leave the village vulnerable to misappropriation of assets.
"There is a potential for misuse or misallocation of borrowed capital project funds, jeopardizing the village's bond rating and the tax exempt status of the bonds, and violating local finance law," the audit reported.
Auditors also found that the books and records were not being closed on a timely basis, resulting in accounting records not being accurate, which can lead to financial decisions being made before records are reconciled.
The audit also found the village wasn't making timely deposits in the justice court fund. That has since been corrected, according to the audit.
The village has hired an experienced CPA as its treasurer and is hiring a part-time accountant to focus on the recommendations, Tobin said.
He said the village has implemented many internal checks and balances since the village discovered former employee MaryClaire Krumholz had written herself $149,500 in checks she said were for overtime beyond her $60,000 annual salary. She said she had permission for the overtime from a former deputy mayor.
"Since then there has been no indication that any money has been lost or misspent," Tobin said. "We succeeded in our primary goal, which was maintaining responsible control over the public funds."
Tobin said one of the first changes made was to start requiring two signatures for all checks. Previously, the village had only required two signatures for checks of more than $5,000. Krumholz wrote herself checks for amounts less than $5,000, Tobin said.
The village is pursuing reimbursement for the money taken by Krumholz. She could not be reached for comment.