Comptroller finds flaws in Hancock court oversight

DiNapoli

Following an 18-month audit of the Hancock Town Justice Court, the Office of New York State Comptroller Thomas DiNapoli recommended that town officials more closely review all court cash assets and liabilities in order to investigate and resolve any discrepancies.

A review of all 611 court transactions during November 2019 and June 2020 found that transactions involving a cash receipt were properly recorded and deposited and that the justice’s adjudication was properly reported to the state Department of Motor Vehicles when necessary, according to the May 21 report.

The sample included 423 duplicate receipts issued, totaling $83,809; 412 tickets disposed of and reported properly to the DMV, 166 tickets still pending, 17 non-traffic related tickets and 16 traffic tickets that were properly collected and deposited by the clerks, but not found in the DMV database.

All $15,563 in disbursements for bail refunds or overpayments from the justice’s account were found to be properly supported, with the exception of “minor discrepancies,” which were discussed with town officials, according to the report.

Court clerks collected fines and recorded them in an accounting system, which outlines the composition of each receipt. Examiners verified that the deposits were made intact — in the same amount and form as collected — and deposited within 72 hours from the date of collection, per state requirements. All of the receipts were traced to bank records and monthly reports and found to be accounted for, according to the report. Revenues were appropriately remitted to the town supervisor in a timely manner.

Hancock Town Justice Michael T. O’Brien maintained one bank account for fines, fees and bail, and a full-time court clerk performed bank reconciliations, but did not prepare monthly accountabilities to ensure that all collections were accurately accounted for and discrepancies could be promptly identified and resolved, according to the report.

A review of the justice’s accountabilities found that cash balances exceeded liabilities as of Dec. 31, 2019, Jan. 31, 2020, and June 30, 2020. As of the latter date, the justice’s cash on hand exceeded known liabilities by $3,436, which was substantiated by court records.

Neither the justice nor the senior clerk could not provide an explanation for the variances, according to the report, but said they were aware of the differences and had been working to resolve the discrepancies prior to the court’s closure amid the coronavirus pandemic.

Examiners determined the variances were caused in part by timing differences with the receipt of credit card payments remitted by the court’s third-party credit card processing vendor and the means by which the clerks record payments in the accounting system, according to the report.

As of Dec. 14, court officials did not know the composition of the unidentified balances because monthly accountabilities were not completed.

“When accountabilities are not prepared, there is a risk that unidentified funds can remain on deposit and that errors or irregularities can occur and remain undetected,” the report read.

In an April 5 response letter, O’Brien wrote that he agreed with the audit findings, pledging to complete the accountabilities report on a monthly basis and consulting with another local town court that uses the same third-party credit card vendor to align strategies and obtain a zero balance.

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