Firm to start audit of Prospect’s financial procedures


By Elio Gugliotti, Editor

PROSPECT — A New York-based firm will start its internal audit of the town’s financial controls and procedures by first gaining an understanding of how the processes work before delving into what deficiencies there may be in the operations.

The Bonadio Group was set to begin the audit this week, Town Council Chairman Jeffrey Slapikas said.

“I had good conversations with them and discussions of what we’re looking for,” Slapikas said during the Town Council’s Nov. 17 meeting.

The firm will review the town’s internal financial controls and evaluate areas vulnerable to fraud and abuse. The company will also look into the adequacy of the town’s fiscal policies and procedures, and the financial and auditing organizational structure.

The internal audit comes in the wake of a theft from the town’s Webster Bank payroll account. Money was stolen from the account from December 2017 to November 2018, according to police. Town officials previously put the amount stolen at about $250,000.

The theft didn’t became public until January of this year when state police announced that they made an arrest in the ongoing investigation.

Members of the public and council questioned the town’s practices, particularly how the thefts went unnoticed for almost a year.

Officials previously pointed to a miscommunication regarding roles and duties when the town switched auditors three years ago. Before the change, the town’s auditor, Mike Battista, reconciled the books monthly. When the town changed auditors, officials assumed the same process was being followed, but it wasn’t.

Officials sought the audit to identify and address any weaknesses and deficiencies in the town’s procedures, and modernize its practices.

Slapikas said the audit will start with the firm interviewing Anne Fortier, the office manager in the mayor’s office, and Town Clerk M. Carrie Anderson and Tax Collector Anne Marie Burr. He said the three positions handle most of the town’s finances and the firm wants to speak with them to get an understanding about the town’s procedures.

Slapikas said there has never been any inclination of wrongdoing by a town employee.

The firm is expected to complete its preliminary work, which covers learning about the financial procedures, by the end of the year, Slapikas said. The firm is slated to finish the audit by the end of March.

Slapikas said he plans to ask the firm to provide an update to the council early next year.

The audit will include a review of financial statements from fiscal years 2013-14 through 2018-19, and possibly the 2019-20 fiscal year.

The six-year period for the audit also covers when seven transactions that totaled about $45,000 were made from the budget for public works employees’ salary to pay five outside vendors and two non-public works employees in the 2014-15 fiscal year. In 2017, the council investigated the transactions. At the time, the transactions were attributed to human error.

The Bonadio Group bid $39,750 for the job, with an additional $6,600 fee if the 2019-20 fiscal year is part of the review. Slapikas said officials will determine whether to include the 2019-20 fiscal year as the audit progresses.