FRANKFORT — The Frankfort town board did not provide adequate oversight over the town’s financial activity, according to an audit report released by the New York State Comptroller’s Office.
But according to a response from Town Supervisor Glenn Asnoe, town officials have already taken action to correct many of the issues the report raises and will correct the others as soon as possible.
“The town board is in the process of completing a corrective action plan and will send that to your office as soon as it is completed,” Asnoe said in a letter dated May 30.
In a telephone interview Tuesday afternoon, Asnoe said the town board has acted on some of the state’s recommendations and is taking steps to be more transparent and accountable. The software
used for the town’s accounting work has been changed from a program appropriate for businesses that was put in place last year to a more detailed municipal accounting system called for by the auditors.
Not all of the changes can be put in place overnight, he said, but added, “We’ve gone over the report and are working diligently to bring the town into full compliance with the way they want things done.”
The report, covering the period from Jan. 1, 2016 to Aug. 31, 2017, follows last year’s state audit report that found deficiencies in the town’s accounting practices and stated that longtime Town Supervisor
Joseph Kinney had not maintained accounting records since 2013 and had not sent required financial reports to the comptroller’s office or made deposits in a timely fashion. Kinney resigned soon after the
report was released.
A key finding of the June 2018 report was that “the board did not establish compensating controls to oversee the former supervisor’s work.” It states that while the board audited claims before payment and
required a second signature on all checks, it did not oversee or put procedures in place to help ensure adequate accounting records were maintained. The report adds that board members said they had
requested financial reports from Kinney, but he did not provide them.
Some discrepancies were found in payroll disbursement. One police officer was overpaid $,1,100 over a four-month period because the former supervisor did not change the officer’s full-time wage rate to a
part-time rate when the officer’s schedule changed. Also a highway clerk was paid an hourly wage but did not complete a time sheet to substantiate the number of hours worked.
Town officials were unable to provide evidence to show that all of the health benefits provided had been authorized by the board. No board-adopted policy or resolution was found to show the board had
authorized elected officials to receive health insurance benefits paid for by the town. In 2016, the town paid about $172,000 to provide full health benefits for the former supervisor, four board members, two
justices, the town clerk and town highway superintendent. In 2017, the cost rose to about $194,000.
The board passed a resolution in 1993 authorizing the town to provide fully paid health insurance benefits to eligible retirees and officials who had 10 years of town service and were at least 62 years old.
The resolution does not clearly define how years of service are determined or whether the retiree’s spouse was to be covered. The audit showed seven retirees and nine retirees’ spouses received fully
paid Medicare Plan C and prescription insurance coverage.
The scope of the audit period for the new report was extended back to Jan. 1, 2013, to check on Frankfort Consolidated Health District funds.
According to state Public Health Law, two or more towns or villages can combine into one consolidated health district to jointly address specific public health issues. A joint board manages the district. The
county treasurer remits property taxes collected for the district to the chief fiscal officer of each district to be deposited into a bank approved by the joint health board.
The report shows that there was no evidence that the Frankfort Consolidated Health District Board had taken any action in several years; town and village officials told auditors that most of the board
members are deceased and new appointments were never made. From 2013 through 2017, the town board included the budgeted revenues and expenditures from the district in its annual budget and taxes
were collected for the district. The report shows the former supervisor stopped keeping records for it in 2013. Frankfort Consolidated Health District funds had been kept in a separate checking account but
when the check supply was exhausted, the supervisor began depositing the district’s annual taxes into the town’s money market bank account and then transferring funds into the town’s checking account to
pay Frankfort Consolidated Health District bills.
The health district issue came up during budget preparations last year when Deputy Town Supervisor John Wallace told the board that the $10,000 Consolidated Health District line item that had been in the
budget each year had been eliminated. The town has had no health officer in some time, he said, and there is no longer a town health board. The county offers the services that were once provided through
The audit recommends the town consult with its legal counsel, village and county officials about dissolving the FCHD and returning the $43,200 of unexpended funds to the county to reduce county
taxes within the town and village.
Segregate the supervisor’s financial duties or establish sufficient compensating controls to provide
Ensure that claims are retained and include proper supporting documentation before authorizing
Authorize all fringe benefits provided to all officials and employees.