Internal controls over wire transfers were not appropriately designed and operating effectively to safeguard Town assets. The Board did not establish written policies or procedures for wire transfers. Consequently, online access to the Town’s bank accounts is not effectively limited. For example, the Supervisor, bookkeeper, and accountant (who is not a Town employee) all have online access to the Town’s bank accounts via a shared user name and password. In addition, the Town does not require confirmations from the bank prior to wire transfers being completed. Furthermore, all 41 of the wire transfers we tested, totaling $949,498, lacked documentation identifying the individual who initiated the transfer, and five of those, totaling $62,195, lacked documentation as to the purpose of the transfer. Due to these control weaknesses, the Board cannot be sure who initiates wire transfers, or if they are appropriate.

Internal controls over purchasing were not adequate. As a result, Town officials made purchases of highway materials totaling $84,570 without properly soliciting or awarding bids, and made procurements of goods and services, such as for the rental of equipment, totaling $36,356 without using requests for proposals or solicting written quotes, as required. The failure to comply with legal requirements and Town policies increases the risk that the Town could overspend for goods and services.

Internal controls over IT are not appropriately designed. The Board has not established policies or procedures for the back up of Town and Court data and remote access to the Town’s computers, or adopted a formal disaster recovery plan. Additionally, backup copies of the Town’s financial data are not stored in a remote location or tested to ensure that the data can be restored. In addition, the Court’s case management application has not been backed up, or tested, since January 2009. As a result, there is an increased risk of loss of important data along with a serious interruption to Town operations, such as not being able to process vendor claims or operate the Justice Court.