Audit and Retention
Preparation
GETTING
ORGANIZED…
AND
STAYING
THERE
Audits 7-393 Fire Proof 7-27
Retention/destruction 7-109
By Carla Hamel, CCMC & Arlene Boutin, CCMC
ADJUSTMENTS
•
•
ADDS
DELETES
O R S E P A R A TE B Y TYP E
•
•
•
•
•
R, P, M OR S
CO’S
VETERANS
ELDERLY
PRORATES
M4-460 Until Audited
BANK CODES
BINDER
 INDIVIDUAL COVER SHEETS
1. BANK NAME AND CODE
2. ADDRESS
3. CONTACT INFORMATION
4. REFUND INFORMATION
 BANK
REQUEST LIST
 ADDS/DELETES
M4-500 ESCROW CODING –
1 YEAR OR UNTIL AUDITED;
WHICH EVER COMES LATER
BANKRUPTCY
 4 HANGING FOLDERS
1.
2.
3.
4.
General Information
Chapter 7
Chapter 11
Chapter 13
 Within each hanging folder
1.
2.
3.
Pending/proof of claim
Dismissed/Discharged
Non-applicable
M4-450 Bankruptcy – 1 year after date of closure
Collection Agency
CONTRACT
CONTACTS
PROBLEMS
MONTHLY SUMMARY
PACK
M3-135 & 145
PAYMENTS RECEIPTS;
3 YEARS OR UNTIL
AUDITED – WHICHEVER IS
LATER
Conferences and Meetings
Credit Cards
CONTRACT
CONTACTS
PROBLEMS
MONTHLY
SUMMARY PACK
M3-145 PAYMENT RECEIPTS;
3 YEARS OR UNTIL
AUDITED-WHICHEVER IS
LATER.
Correspondence
TAXPAYERS
M1-080 ROUTINE – 2 YEARS
TOWN ATTORNEY
*DEPENDS*
YOUR LEGISLATIVE
BODY
M1-085 CORRESPONDENCEPOLICY-PERMANENT
DMV
TUMBLEWEED INFO
SFILE.CT.GOV
CONTACT:
GARY TRERICE
860-263-5387
DMV.TAXCOLLECTOR@CT.GOV
DMV DIRECT
OTHER RELATED INFORMATION
Department of Motor Vehicle
 PUTONS
 ERROR
REPORTS
 TAKEOFFS
 ERROR
REPORTS
M4-550 - 1 YEAR
FROM DATE OF
REPORT
M4-550 - 1 YEAR
FROM DATE OF
REPORT
Organizing Email
Review M1-125, M1-130 & M1-135
Expenditures
 Maintenance
 Membership
 Meetings/trainings
 Miscellaneous
 Printing/binding
 Publications
 Supplies
 Travel
Legal Information
LEGAL NOTICES
(M4-540- 15 YEARS FROM
DUEDATE OF TAX)
RATEBILL/TAX WARRANTS
(M4-570 - 15 YEARS FROM
DUE DATE OF TAX)
LEGAL OPINIONS
(M1-185 PERMANENT)
ORDINANCES/PUBLIC ACTS
STATUTES
OFFICE
POLICIES/PROCEDURES
Liens
Real Estate Liens
Personal Property
Liens
 Binder
 Binder
containing each
lien or list of
liens
 Notate date,
volume and page
recorded in
 Notate date,
volume and page
released in
(M4-630, M4-640, M4650)
containing each
lien or list of
liens
 Notate date, &
UCC filing
number for
filing
 Notate date, &
UCC filing
number for
releasing
MISCELLANEOUS
BLANK RELEASES
FAXES
(M1-080 – CORRESPONDENCE,
ROUTINE: INCLUDING FOI
REQUESTS)
OFFICE POLICIES & MANUAL
Personnel
ABSENCE FORMS
VACATION FORMS
ACCIDENT FORMS
CERTIFICATES
JOB DESCRIPTION
APPOINTMENT
COPY OF BOND
TIMESHEETS
Post Office
 Forms
 Mailings
 Permit information
 Meter
 PO Box
Final Posted Ratebooks
(M4-580) 15 years from due date
Refunds
(M4-660)
TAX REFUND REQUESTS
& REPORTS
3 YRS OR UNTIL
AUDITED,
WHICHEVER COMES
LATER
REPORTS
 Monthly budget
reports
 Quarterly reports
F -71 Quarterly
survey of property
tax collections from
Dept of Commerce,
US Census Bureau
Not on retention
schedule but
suggested 2-3 years.
Returned Checks
 Outstanding
returned
checks
M3-135 &145 –
3 years or until
audited;
whichever is later
 Paid checks
Retention Schedule
Requests………
Approved Requests
M1 - GENERAL
ADMINISTRATIVE RECORDS
M3- FISCAL RECORDS
M4 – ASSESSMENT & TAX
COLLECTION RECORDS
W W W . C T S T A TE L I B R A R Y . O R G
M1-110 DISPOSAL REQUESTS –
RC075 PERMANENT
Software Company
 Contract
 Contacts
 Problems
STATE REPORTS
 FORMS
1.
(M-1) Annual Report of Municipal
Property Tax Collectors – M4-470Certification of millrate & tax levy; 3 years or
until audited whichever is later.
2. (M-35b) Elderly & Totally Disabled
Homeowners
3. (M-42b) Totally Disabled
4. (M-59) Additional Veterans
5. (M-36) Freeze
#’s 2-5 all use M4-510 Exemption of
State Reimbursement –
3 years or until audited; whichever is
later.
Tax Bills
UNDELIVERABLE
(M4-610) 1 YEAR OR UNTIL
AUDITED WHICHEVER IS LATER
Town Attorney
Accounts
SEPARATE FOLDERS
FOR EACH ACCOUNT
PLACED
WARRANTS
SEPARATE FOLDER FOR
EACH
MARSHAL/CONSTABLE
PAID IN FULL
M4-430 - 1 YEAR FROM
DATE COLLECTED OR DATE
ISSUED;IF UNCOLLECTED
End of the Fiscal Year
ADJUSTMENTS FOR FISCAL YEAR
REFUNDS FOR FY
COLLECTION AGENCY FOR FY
EXPENDITURES FOR FY
BATCHES FOR FY
RETURNED CHECKS
WARRANTS PAID IN FULL
PULL OUT ANYTHING ELSE THAT
CAN BE SHREDDED
LABEL WITH FISCAL YEAR
CLEARLY MARKED AND DESTROY
DATE ON THEM
Winchester Embezzlement Investigation Timeline:
August, 2012
Auditors trying to complete the 2011 annual audit
noticed an unusual account called “change line item” and began to ask
questions of Finance Director and were not getting appropriate answers.
November, 2012
Finance Director was put on “Administrative
Leave” and finally dismissed in January, 2013
January-August, 2013 Auditors were asked to look deeper and
started to find discrepancies. Forensic audit began. (250,000 tax bills
from Jan, 2008 – Nov, 2012 were pulled by office staff, making copies of
every batch deposit ticket, batch settlement totals, and bank statements
for every batch for both auditors and state investigators. Copies were
reviewed to verify cash/checks listed on tax office deposit ticket were
actually deposited at bank as batch sheets reported. (They were not.)
 Cash was removed from Tax Office deposits and replaced with checks
from other departments, from vendors, and town checks to make
deposit whole. (Loss to Town – verified to be greater than$2 million)
 Audit found that IRS W-2 forms for Finance Director had been
altered from 1995. (Financial Loss to Town - $184,515)
 Large amounts of cash found in his desk and office safe.
January, 2013 Criminal investigation began by Major Crime Squad.
June, 2013 Town Hall and Tax Office staff questioned by State Police
investigator for his deposition prior to issuing arrest warrant.
August, 2013 Finance Director arrested and taken to New Haven
January, 2014 Finance Director pled guilty to five counts of larceny in
the first degree
April, 2014 Sentencing, expected to be 20 years, suspended after 11
years served and probation
KEEPING OFFICE ORGANIZED
 Daily batches should be balanced and verified to
insure that daily deposit to bank agrees with daily
batch AND bank statement.
 Copy of deposit ticket should be kept with daily
batch attached with batch total report.
 Daily batch total > Deposit slip prepared>Bank
receipt - All should equal.
 Policies and Procedures should be in place:
 Cash & checks locked up every night.
 Large amounts of cash should not be kept in cash
drawers.
 No third party checks or personal checks cashed out
of cash drawers.
 If hand calculating interest, calculation tape should
be attached to tickets, per auditors.
Internal
Controls
 Management responsibility
 Written policies and procedures –
control environment
 Protect assets
 Ensure integrity of financial reports
 Control ledgers
 Reconciliation of cash
 Segregation of duties – separate the
ability to commit from the ability to
conceal
 Independent Checks
 Controlled Access
 Electronic processing controls
As seen in past tax collector handbook
Auditing the Tax Collector’s Office
 Segregation of Duties: Is the individual who collects
cash receipts someone other than the individual who
prepares the deposits and records cash receipts
 Are receipts deposited intact on a daily basis?
 Does the Tax Collector maintain a separate bank
account?
 Does the Tax Collector maintain a control book on a
current basis?
 Is the individual who maintains the control book
someone other than the individual who posts receipts
and changes to the detail accounts in the rate book?
 Are rate books periodically balanced to the control
book?
 Are all Assessor’s corrections numerically accounted
for and properly posted to the rate books and control
book on a timely basis?
 Has the abstract been reconciled to the beginning
balances in the rate books?
Tax Collector’s Report:
Does the Tax Collector prepare an annual report?
 Do beginning balances for each prior year’s list
agree with the prior year’s report?
 Does the beginning balance for the current year
agree with the original rate book totals as
reconciled to the abstract?
 Do amounts in the report agree directly, or
through adjustments, with the property tax
revenue recorded in the General Fund?
 Do the totals per the Suspense List agree to the
totals shown on the Tax Collector’s Report?
 Do the totals per the list of refunds agree to the
totals shown on the Tax Collector’s Report?
 Are there any other adjustments posted to the
rate books?
 Do collections reconcile to the amounts turned
over to the Treasurer?
 Do the ending outstanding balances per the
report agree to the totals per the rate books?
Other items included in the Audit
 Are all liens properly continued and certificates
filed with the Town Clerk on a timely basis?
 Do prepaid taxes agree to amounts recorded in
the control book?
 Are control totals maintained for the Suspense
Tax Book and do they agree to the totals of the
detail?
 Are back tax bills issued on a timely basis?
 Are lists of delinquent motor vehicle tax payers
filed with the Department of Motor Vehicles on a
timely basis?
 Are lien fees collected by the Tax Collector paid to
the Treasurer?
 Are collection enforcement mechanisms (tax sale,
foreclosures, tax lien assignment) instituted on a
timely basis?
 Is interest consistently charged at the proper
statutory rate on all overdue taxes?
 Are accounts that are turned over to third parties
for collection properly controlled?