AP recovery audit uncovers financial mismanagement in New York town

May 25, 2011 Auditors found that revenues had been routinely underreported.

A recent accounts payable recovery audit found that the town of Keene, New York, had made nearly $262,000 worth of payments to wrong accounts. This was largely a result of a lack of adequate internal controls and the fact that the town has 23 active bank accounts – some of which were opened without the supervisor's knowledge – according to the Press Republican.

"(Keene) maintained a checking account for the general, highway, library and two special water district funds, although town officials did not issue checks from these accounts during our audit period," said the audit, quoted by the news source.

Auditors examined the town's finances from January 2009 to September of last year. During that period, it was determined that monthly bank-to-book reconciliations for the town's abstract and payroll checking accounts had not been conducted since 2007, and revenues were often underreported.

The town supervisor recommended 10 corrective audit solutions, including purchasing a new computer database and restricting the privilege of opening new accounts.

An AP recovery audit of the Chancery Court Clerk's Office in Memphis, Tennessee, uncovered more serious mismanagement – the court's bookkeeper had funneled more than $130,000 from the office to a company he had set up, according to the Commercial Appeal. 

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Category: Accounts Payable Analysis

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