Published: September 23, 2008 05:16 pm      

Audit rips Butternuts supervisor

By Mark Boshnack

Staff Writer

An audit released Monday by the office of the state Comptroller said the town of Butternuts has been run for years virtually without accounting records or financial reports.

The audit pointed a finger at the record keeping and reports, whether completed or not, by Supervisor Keith Lilley.

Because of poor record keeping, auditors said they were unable to verify that all money disbursed was accounted for properly _ even after extensive testing.

Records were so incomplete that the town was unable to explain why a savings account balance was decreased by $7,628. The audit covered the period January 2006 to November 2007.

Lilley, however, said Monday that the audit did not paint a full picture of the situation. He said it did consider problems he was having with a town computer that prevented better record keeping during that time. A new machine has been purchased, he said.

When records were kept, the audit report found fault with some of the accounting carried out by Lilley in running the town. It also found fault with fund transfers made without proper authorizations among other things.

There was nothing criminal in the findings, but the town board was unable to monitor the fiscal situation and make decisions as a result of the missing records, said comptroller spokesman William Reynolds.

Since Lilley was elected in 1999, neither he nor the town board realized the need for motions every time funds were transferred, or being able to account for “every scrap of paper.”

The town has adopted a computer replacement policy that will prevent similar problems in the future, Lilley said. Transfers of funds are also now being done in accordance with state regulations and he is keeping records that are more to auditor’s requirements, Lilley said.

He is paid $8,000 a year in the post, town clerk Evelyn Butler said.

Among the audit’s findings are that Lilley did not obtain board authorization for an inter-fund advance and that he did not present his records and reports to the board for audit. In addition, the financial reports provided to the board and filed with the state comptroller’s office were erroneous and/or untimely, according to the audit.

Recommendations include monthly reconciliation of bank statements, recording all inter-fund activity on general ledgers and maintaining comprehensive investment records.

The steps will take some time to fully implement but the situation will meet auditor’s requirements, Lilley said.

With the audit completed and an functional computer system, reports should be more timely. He disputed that previous reports were inaccurate.

Calls were placed to the four town council members. Dennis Ackley, Donald Hunt and Everest Dibble Jr. did not return the calls.

Councilman Raymond Musson said Monday that he did not want to comment on the situation until he has had a chance to read the report and hear what is being done to straighten out the problems. His impression was that the problems have to do with record keeping, he said.

Councilmen Dennis Ackley, Donald Hunt and Everest Dibble Jr. did not return phone calls Monday.

The board has 90 days from the receipt of the report to come up with an action plan to correct the situation, said Reynolds. If subsequent audits are conducted, the comptroller’s office will be looking to see that the plans are followed