Audit reveals $7M bookkeeping error

By DAVID HULSE

MONTICELLO, NY — Sullivan County’s $13 million unreserved fund balance was reduced to about $6 million on July 8 when the county auditors’ 2003 annual report revealed that $7.2 million in state and federal aid had been posted twice.

Finance Commissioner Richard LaCondre said the errors occurred in the years 2001 and 2002 on various budget accounts in the Division of Family Services and Community Services, when grant and program funding was announced.

Upon the announcement of funding, ledger entries were made to various budget lines under their program codes. However, when checks were received from state and federal sources, they were sometimes coded differently and on those occasions duplicate entries were made.

There are dozens of funding sources for the various agencies involved and some of the funding sources are designed to overlap others after one funding stream is expended.

LaCondre said that the audit report had not been a complete surprise as his staff had discovered some of the duplications, about $4 million worth, as early as this past January. “We’ve already begun mechanisms to catch these in the future,” he said.

He said staff and several legislators were aware of the problem early on.

But Finance Committee Chair Jonathan Rouis, who is a Certified Public Accountant, said he only learned of the problem on July 7.

“The fact that it occurred is of serious import,” he said, adding, “We need to find out from staff how it happened and be certain it doesn’t happen again.”

With the loss of landfill waste importation fees, a three-fold increase in county funding of the state retirement program, double-digit increases in health insurance, petroleum and Medicaid costs, Sullivan County was already facing a budget deficit for 2005.

The audit findings were particularly frustrating for Rouis, who has been asking staff to provide more timely financial information since taking office in January.

“We used $13 million from the fund balance to balance last year’s budget. If we had the same budget again, which we can’t, we couldn’t do that now,” he said.

Rouis said he anticipated that this year’s budget preparation was “going to be a long process. We’re going to have to be more creative than ever,” he said.

Legislative Chair Chris Cunningham said there had been “anecdotal” discussion earlier but no official word of the errors prior to the audit report. “This is obviously a serious issue. Fifty percent of our discretional money just disappeared.

Still, he added, “I’m confident we’re going to get through this.”