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Audit faults 10 public entities on failure to account for funds from scrap sales

Some municipal governments and a school district in Western New York have been failing to properly account for the proceeds from selling scrap metal, according to a state audit.

Auditors from the State Comptroller's Office found that, officials of 10 entities cannot account for what happened to more than a fifth of the money they received from scrap metal sales.

A total of $27,224 was missing from scrap metal sales between January 2006 and December 2009, Comptroller Thomas P. DiNapoli said.

"Missing money is never a good thing, especially when it's taxpayer dollars," DiNapoli said Monday in a news release. "This is clearly a widespread problem. Local governments should have policies to make sure taxpayer money is protected."

The audit found discrepancies involving scrap metal sales conducted by Genesee County's government, the Batavia School District, the towns of Elba, Middlebury, Oakfield and Pembroke, and the villages of Elba and Sloan.

Sloan is in Erie County, Middlebury is in Wyoming County, and the others are in Genesee County.

Auditors also looked at scrap metal sales conducted by Cheektowaga and the City of Batavia, but they said all those sales proceeds were accounted for.

The audit focused on scrap metal sales totaling $132,000 in the Western New York communities.

"We found that scrap metal is often held in unsecured areas, or in secured areas that are accessable to a large number of employees," auditors wrote in a 17-page report. "With the exception of the City of Batavia and the Town of Cheektowaga, these entities had neither formal nor informal procedures to identify which employees are responsible for transporting scrap materials."

According to DiNapoli, some of the money from scrap metal sales disappeared because "governing boards failed to establish formal policies and procedures for controlling access to scrap materials and the revenues related to their sales. In some cases, the revenue was used to purchase new items and pay for functions that were not included in the local government's or district's budgets."

DiNapoli urged the entities in which problems occurred to enact tighter regulations to prevent the theft of scrap materials.

Buyers should be required to pay only with checks payable to the public entity conducting the sale, the comptroller also suggested.

The full audit can be found in the local government audits section of the state comptroller's website, www.osc.state.ny.us.

e-mail: dherbeck@buffnews.com

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