The Village of Cobleskill’s finances are in a mess, according to an audit.
The independent audit 2016, released last week, found a “major breakdown,” “material errors,” and overspending among other problems in Cobleskill’s budgeting.
In an emergency meeting Friday, the village board hired Lyn Lawyer, a certified public accountant in Cobleskill, to help. (See related story.)
Mostert, Manzanero & Scott, CPAs in Oneonta, performed the audit, which is done every year. It examines all aspects of village finances for 2016, including revenue and expenses, cash flows, the general fund and water and sewer funds.
The audit lists “material weaknesses”––more serious errors––and “significant deficiencies.”
Material weaknesses found were:
•Overall failure of accounting system. “There appeared to be a major breakdown in posting information to the accounting system,” the audit states. Without proper posting, “the Village cannot properly protect its financial assets.”
•“Material errors in the financial reports” that “rendered the system and reports nearly useless.”
•“Bank reconciliations were being reconciled to the checkbook balance but not to the general ledger. . .new personnel were not properly trained.” This could have been corrected, according to the audit, but because it was not done in a timely manner, “the errors continued and were compounded, until it became nearly impossible to correct the Village’s accounts.”
Significant deficiencies included:
•Balance sheet accounts “had not been adjusted to their proper amounts at year end.” “This may lead to the Village Board basing decisions on incorrect financial data.”
•Transfers from one account to another were not recorded properly. “the Village’s cash positions, as shown on the general ledger of each fund, were materially incorrect.”
•Although the village board reviews monthly abstracts, “we saw no evidence that they review other financial reports.” “A key role of the Village Board is to monitor the financial condition of the Village and provide oversight of the Clerk/Treasurer.”
•Overspending. The CPAs “found the Village overspent general fund budget line items without performing budget modifications.”

VILLAGE DEPENDS
AUDIT AS “INJUSTICE’

Cobleskill’s financial situation isn’t nearly as bad as an audit claims it is, Mayor Linda Holmes said Monday.
The audit for 2016 details numerous errors and failings in the village’s accounting system and recordkeeping. But Mayor Holmes called the audit “an injustice” because the accountants lacked all information and the village’s software was faulty.
At the same time, however, she acknowledged that there were problems with 2016 finances, and those could be traced to specifics.
Both Clerk-Treasurer Samantha Moyster and her deputy were on maternity leave in the last quarter of ’16, and about that time, the village’s software crashed, Mayor Holmes said.
Also, some information wasn’t available to the auditors.
“One person I talked to said they couldn’t believe they even did it [the audit],” Mayor Holmes said. “I feel there’s some injustice.”
Trustee Nancy Van Deusen agreed with Mayor Holmes, adding that the village also has fewer office staff than in the past.
“It was a matter of circumstances,” Ms. Van Deusen said.
When both clerks were out, Mayor Holmes said, she and board members tried to work on reconciling accounts.
“We were helping out where we could,” she added.
Still, the problems mounted.
“I think the village board didn’t recognize how serious the problem was,” Ms. Van Deusen said.
The time lag concerns Ms. Van Deusen. She’s worried that because the village received the report a year later, mistakes might have continued through 2017.
Mayor Holmes maintained that the village isn’t broke. There is money in bank accounts, she said.
“If it was so bad, how did we get through 2017?” Mayor Holmes asked. “How come we still have money in our bank accounts?”
Still, because the audit appears so critical, the state Comptroller’s Office is investigating, Mayor Holmes said.
Mayor Holmes and Ms. Van Deusen met with Lyn Lawyer, a certified public accountant in Cobleskill, and in an emergency meeting Friday, the board hired Ms. Lawyer to help straighten out the finances.
The village will pay Ms. Lawyer $35 per hour.
Jerri-Lyn Chronis is the new deputy clerk, and ads are already in place for a new clerk-treasurer to replace Ms. Moyster.
Interviews should take place next week, Mayor Holmes said.
At the same time, others will receive training on the village’s accounting system.
Even if she feels the audit was an injustice, “it does show issues we need to look at,” Mayor Holmes said.
“We can’t go backwards. I think in the future, we’ll do a six-month review to make sure everything’s working well. And we’ll discuss other options, too.”