town of virgil - new york state comptroller town of virgil (town) is located in cortland county and...

Division of LocaL Government & schooL accountabiLity

o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r

report of ExaminationPeriod Covered:

January 1, 2013 — January 27, 2015

2015M-77

Town of VirgilJustice Court Operations

thomas p. Dinapoli

Page

AUTHORITY LETTER 1

INTRODUCTION 2 Background 2 Objective 2 Scope and Methodology 2 CommentsofTownOfficialsandCorrectiveAction 2

JUSTICE COURT OPERATIONS 4 Recommendations 5

APPENDIX A ResponseFromTownOfficials 7APPENDIX B OSC Comments on the Town’s Response 10APPENDIX C AuditMethodologyandStandards 11APPENDIX D HowtoObtainAdditionalCopiesoftheReport 13APPENDIX E LocalRegionalOfficeListing 14

Table of Contents

11Division of LocaL Government anD schooL accountabiLity

State of New YorkOffice of the State Comptroller

Division of Local Governmentand School Accountability August2015

DearTownOfficials:

A toppriorityof theOfficeof theStateComptroller is tohelp localgovernmentofficialsmanagegovernment resources efficiently and effectively and, by so doing, provide accountability for taxdollarsspenttosupportgovernmentoperations.TheComptrolleroverseesthefiscalaffairsoflocalgovernmentsstatewide,aswellascompliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversightisaccomplished,inpart,throughouraudits,whichidentifyopportunitiesforimprovingoperationsandTownBoardgovernance.Auditsalsocanidentifystrategiestoreducecosts and to strengthen controls intended to safeguard local government assets.

FollowingisareportofourauditoftheTownofVirgil,entitledJusticeCourtOperations.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.

This audit’s results and recommendations are resources for local government officials to use ineffectivelymanagingoperationsand inmeeting theexpectationsof their constituents. Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedat the end of this report.

Respectfullysubmitted,

Office of the State ComptrollerDivision of Local Governmentand School Accountability

State of New YorkOffice of the State Comptroller

2 Office Of the New YOrk State cOmptrOller2

Background

Introduction

Objective

Scope andMethodology

Comments ofTown Officials andCorrective Action

The Town of Virgil (Town) is located in Cortland County and has approximately 2,400 residents. The Town is governed by anelected Town Board (Board) which includes the Town Supervisor (Supervisor) and four Board members. The Board is responsible for the general oversight of the Town’s financial activities, whichincludesthefinancialoperationsoftheTownJusticeCourt(Court).

TheCourthasoneelectedJusticewhoisresponsibleforoverseeingCourtoperations.TheJusticeemploysaCourtclerk(clerk)toassistwith thefinancial responsibilities.TheJusticehas jurisdictionovercertain civil and criminal cases and adjudicates motor vehicle and trafficviolations(traffictickets).TheJusticeisusingacomputerizedsoftware system (system) to account for the majority of the Court transactions. The Justice imposes and collects fines, fees and bailmoneyandisresponsibleforreportingtheCourt’smonthlyfinancialactivities to the StateComptroller’s JusticeCourt Fund (JCF) andremitting all moneys collected to the Supervisor. The Court reported atotalofapproximately$69,000infinesandfeesduring2013and2014.

The objective of our audit was to review the internal controls over the Court’sfinancialactivity.Ourauditaddressedthefollowingrelatedquestion:

• Did the Justice ensure proper controls were in place toadequately safeguard moneys?

WeexaminedtheCourtrecordsandreportsfortheperiodJanuary1,2013throughJanuary27,2015.

We conducted our audit in accordance with generally accepted governmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixCofthisreport.Unlessotherwiseindicatedinthisreport,samplesfortestingwereselectedbasedonprofessionaljudgment,asitwasnottheintenttoprojecttheresultsontotheentirepopulation.Where applicable, information is presented concerningthevalueorsizeoftherelevantpopulationandthesampleselectedforexamination.

The results of our audit and recommendations have been discussed withTownofficials,andtheircomments,whichappearinAppendixA, have been considered in preparing this report. Except as


specified inAppendixA,Townofficials generally agreedwith ourrecommendations and indicated they planned to take corrective action.AppendixBincludesourcommentsontheissuesraisedintheTown’s response letter.

The Board has the responsibility to initiate corrective action. Awrittencorrectiveactionplan(CAP)thataddressesthefindingsandrecommendations in this report should be prepared and forwarded to our office within 90 days, pursuant to Section 35 of GeneralMunicipalLaw.FormoreinformationonpreparingandfilingyourCAP, please refer to our brochure, Responding to an OSC Audit Report,whichyoureceivedwiththedraftauditreport.Weencouragethe Board to make this plan available for public review in the Town Clerk’soffice.


Justice Court Operations

TheJusticemustensureadequatecontrolsareinplacetosafeguardallmoneyscollectedbytheCourt.ThesecontrolsshouldhelptheJusticeensurethatallreceiptsaredeposited,ticketsareproperlyaccountedforandadjudicated,1dismissalsareproperlysupported,disbursementsto the Supervisor are accurate and Court transactions are properly reported to JCF.The Justice is also responsible for collecting andaccounting for bailmoneys received.The Justicemust ensure thatCourt collections are reconciled to corresponding liabilities (monthly accountability) and the status of each vehicle and traffic ticket isperiodicallyupdatedwiththeNewYorkStateDepartmentofMotorVehicles (DMV).

The Justice should have procedures regarding the enforcementof unpaid tickets to ensure fines are collected as soon as possibleandCourt personnel shouldmaintain sufficient records to identifybalances of unpaid fines.An option for any ticketswith fines andsurcharges that remain unpaid is to use DMV enforcement through its ScofflawProgram.2TheJusticeisrequiredtopresenthisrecordsanddockets to the Board for audit at least once a year. The purpose of this annualauditistoidentifyconditionsthatneedimprovement,providegeneral oversight of Court operations and assure that public money was properly deposited and accurately recorded and accounted for.

TheJusticegenerallyensurescontrolsareinplacetosafeguardmoneys.WhiletheJusticehasadequatecontrolsforfinesandfeescollectedbytheCourtandallmoneyscollectedareproperlyaccountedfor,theJustice does not ensure the clerk is pursuing collections of unpaidtraffictickets.Asaresult,theCourthas17unpaidticketsinourscopeperiodthatcouldrepresent$2,900inuncollectedfinesandfees.Inaddition,althoughtheBoardperformsanannualauditoftheJustice’srecords,itcouldbeenhancedbyincludingareviewofdocumentationsuchascasefilesandbailrecords,inadditiontothebankstatementsandtheJCFreportsthatarealreadyincludedintheaudit.

1 TheJusticemustmakeaformaljudgmentordecisiononeachticket(i.e.,fine/feeor dismissal).

2 NewYork State law provides that a NewYork State driver’s license, or theprivilegetodriveinNewYorkStateforout-of-statelicensees,willbesuspendedifthelicenseefailstoappearinresponsetoatrafficsummonsorfailstopayafineimposedbythecourtafter60days.Afterasuspensionoccurs,thedefendantmustalsopaya$70scofflawfeeinadditiontoanyfinesandsurchargesbeforethe suspension is lifted.


Cash Receipts and Disbursements — The clerk handles the majority ofthecashcollections,doesalltherecordinginthesystemandreportscasedispositionstoDMV.TheJusticemakesthedeposits,preparesand signs all the checks (to the Supervisor and for returned bail) andsubmitsmonthlyreportstoJCF.TheJusticeinformedusthathereviews the cashbook report3 to ensure the money the clerk recorded ascollectedwaswhathedeposited.TheJusticealsoindicatedthathereviewsJCFreportsbeforehesubmitsthemtoensuretheactivityisreported properly and does informal monthly accountabilities.

We gathered and traced evidence from the Town’s system, DMV,JCF,bankstatementsandcasefilestoensureticketswereproperlyadjudicated,depositedandreportedtoDMVandJCF.Wealsotestedall bail disbursements to ensure they were properly returned and the ending bail balance in the bank was supported by a list of bail. Our tests revealed minor immaterial discrepancies that we communicated totheJustice.Wealsoperformedamonthlyaccountabilityfortwomonths and found that the Justice had enoughmoney in his bankaccount to cover his liabilities.

PursuingCollections–TheJusticedoesnothaveproceduresfortheclerktofollowwithrespecttopursuingunpaidtrafficticketsanddoesnotensuretheclerkmaintainsalistofunpaidtraffictickets.

Due to these control weaknesses, we evaluated the Court’senforcementefforts.Of the48caseswe reviewed,17 ticketswereeligible for referral to the DMV Scofflaw Program but were notreferred.Althoughtheclerkconsistentlyreferredticketsinsituationswhere the defendants did not appear for their court dates, she didnotconsistentlypursuecollectionsofticketswhereafineorfeewasadjudicated andoutstandingfines and feeswere still due. The17tickets could represent potentially $2,900 in uncollected fines andfees.

Lastly,althoughtheBoardperformsanannualauditbyreviewingthebankstatementsandtheJCFreports,Boardmembersindicatedtheydonotreviewanyotherrecords,suchassupportingcasefilesandbailrecords/disbursements.Amorethoroughannualauditwouldensurebail disbursements are proper and provide the Board with an added measure of assurance that Court moneys are safeguarded and unpaid trafficticketsarepursuedinatimelymanner.

TheJusticeshould:

1. Ensureunpaidtrafficticketsarepursuedinatimelymanner.

3 This is the cash receipts journal in the system.

Recommendations


2. Ensuretheclerkmaintainsalistofunpaidtraffictickets.

TheBoardshould:

3. EnhanceitsannualauditoftheJustice’srecordsandreportstoensurebaildisbursementsareproperandtrafficticketsarepursued in a timely manner.


APPENDIX A

RESPONSE FROM TOWN OFFICIALS

TheTownofficials’responsetothisauditcanbefoundonthefollowingpages.

The Town’s response letter refers to a page number that appeared in the draft report. The page numbers havechangedduringtheformattingofthisfinalreport.


SeeNote1Page10

SeeNote2Page10

SeeNote3Page10


SeeNote4Page10


APPENDIX B

OSC COMMENTS ON THE TOWN’S RESPONSE

Note1

Eachticketisissueditsownidentifyingnumberandanindexnumberthatisunique.Eachticketcouldpotentiallyhaveitsownfineandis,therefore,treatedindividually.

Note2

At the timeof our review, these tickets hadnot yet been submitted toDMV for suspension. WecommendtheJusticefortakingcorrectiveactionontheseoutstandingtickets.

Note3

Courtofficialsdidnotpresentanyrecordstoindicatethisticketwasdismissed.

Note4

The estimates in our report do not “impose an expectation on the judiciary ofwhat the sentencewill be.” We simply inform the reader of the potential value of the tickets that were not pursued. We understandthatsomeoftheoutstandingticketscouldresultindismissal,whichiswhyourreportstatesthat“ticketscouldrepresentpotentially$2,900inuncollectedfinesandfees.”


APPENDIX C

AUDIT METHODOLOGY AND STANDARDS

Toaccomplishourauditobjective,weinterviewedappropriateTownofficials,testedselectedrecordsand examinedpertinentdocuments for theperiod January1, 2013 through January27, 2015.Ourexaminationincludedthefollowing:

• We interviewed the Justice, Board members and clerk to gain an understanding of Courtoperations and oversight. We asked about written policies and procedures, monthlyaccountability reviews and the annual audit process.

• Weobtainedabackupofthedatainthesystemandcomparedthisinformationusingcomputer-assistedtechniquestotheDMVandJCFrecordstoensureticketswereaccountedforproperlywithinthesystemandthattheywerereportedtoDMVandJCFproperly.Basedontheresultsof this analysis, we followed up on 29 tickets with respect to adjudications, deposits anddismissals.Wetracedtheticketstocasefilesandbankstatementstodetermineiftheywereproperlyadjudicated(15),deposited(17)anddismissed(two).4

• Wesent18confirmationletterstodefendantstodetermineiftheCourtrecordswereaccurate.

Wejudgmentallyselecteddefendantswhoonlypartiallypaid(three),receivedadoglicensingticket(one),didnotpayatall(10,startingwiththemostrecentcrimedateandgoingback),hadadjudicationdatesinNovember2014andDecember2014(two)andhadrecordsdeletedfrom thesystem(two).Wedidnot receiveanyback. Itwasnotnecessary to followuponanyconfirmationsorsendoutadditionalconfirmationsbecausewehavereasonableassurancefraudisnotoccurring,sinceourothertestingdidnotrevealanysignificantfindings.

• We obtained the bail list and ensured the total amount matched the total amount in the bail bank account.

• We obtained all bank statements for the bail accounts. We reviewed all eight canceled check images, totaling $7,550, to ensure that bail disbursementswere appropriate by tracing thedisbursementstothemanualcasefiles.

• Wetracedeightdepositstotaling$5,383fromthesystemtothebankstatementsforDecember2013andJune2014toensuredepositsweremade.Wearbitrarilyselectedthetwomonthsandhadnoexpectationthatmoreorfewererrorswouldoccurinachosenmonththaninanyothermonth.

• WeperformedamonthlyaccountabilityofthefineaccountforDecember2013andJuly2014;wearbitrarilyselectedthetwomonthsandhadnoexpectationthatmoreorfewererrorswouldoccur in a chosen month than in any other month. We reviewed the check images for the checks totheSupervisorforthesemonthsandensuredtheymatchedthemonthlyreportsfiledwiththeJCF.

4 Wetestedasampleofthe29ticketsforeachobjective;therefore,thetotalnumbertestedforallthreeobjectivesdoesnotaddupto29.


• We compared the system’s “charges data” to the system’s “checkbook data” for our scope period.Wetraced19ticketstothecasefilestoensuretheywereproperlyadjudicated. Weselectedallcasesthatwesentconfirmationsto(18)andthefirstcaselistedonthesecondpageoftheJanuary2015JCFreport.Wealsoarbitrarilyselectednineticketsandtracedthemtothecasefilestoensuretheywereproperlydismissed.

• Wecomparedthecharges in thesystemto thereceipts in thesystemfromJanuary1,2013throughAugust 31, 2014 to determine the unpaid traffic tickets (theDMVdatawas as ofDecember2014,andtheCourtcanonlypursuecollectionsoncasesthatare60dayspastdue,foreithernotshowingupforcourtorforthelastpaymentdateplus60daystoallowtimeforschedulingcourtdates,adjudicationsandpayments).Wecomparedthisdatabyindexnumberto determine those tickets where the defendant either did not pay or only partially paid or the defendant’scasehadnotbeenadjudicatedyet.Fromthislist,weremovedanycasesthatwerepaidasofFebruary2015orthatwerereferredtotheDMVScofflawProgramasofDecember2014togetalistofunpursuedtraffictickets.

• We reviewed the pending tickets per DMV and determined the total number of tickets referred to the DMV Scofflaw Program and how many remained outstanding from January 2013throughAugust2014.Wecalculatedanaverageticketfine/surchargebasedonunpaidticketsfromJanuary1,2013 throughAugust31,2014. Weapplied thisaverage to thenumberofticketsthatremainoutstandingtocalculateanestimateofpotentialuncollectedfinesandfees.

WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperform theaudit toobtainsufficient,appropriateevidence toprovidea reasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.


APPENDIX D

HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT

OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/

Toobtaincopiesofthisreport,writeorvisitourwebpage:


APPENDIX EOFFICE OF THE STATE COMPTROLLER

DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller

GabrielF.Deyo,DeputyComptrollerNathaalieN.Carey,AssistantComptroller

LOCAL REGIONAL OFFICE LISTING

BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]

Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties

BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]

Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties

GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOneBroadStreetPlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]

Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties

HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250 Veterans Memorial HighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]

Serving:NassauandSuffolkCounties

NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]

Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties

ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThePowersBuilding16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]

Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties

SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]

Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties

STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313

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