A state audit has found significant financial management failures in the Town of Cato, including hundreds of thousands of dollars in unrecorded transactions and years of missing required financial reports.
The New York State Comptroller’s Office determined the town supervisor failed to maintain complete, accurate and up-to-date financial records, leaving the town board without reliable information to oversee operations.
Auditors identified $348,817 in receipts and $744,572 in disbursements that were not recorded in the town’s accounting system or reported to the board between 2022 and mid-2025. The report found these gaps stemmed largely from a lack of oversight after the supervisor delegated financial responsibilities to a bookkeeper.
The audit also uncovered widespread issues with internal controls, including inadequate bank reconciliations, missing documentation for more than $574,000 in spending, and 259 transactions totaling over $580,000 that lacked evidence of board approval. In one case, an employee was overpaid by $2,600 due to payroll errors that went undetected.
Compounding the issues, the town failed to file required Annual Financial Reports for multiple years. While the 2017 report was eventually filed more than four years late, filings for 2018 through 2024 remained outstanding as of late 2025, reducing transparency and limiting public oversight.
State auditors warned the deficiencies increase the risk of fraud, waste and abuse, and issued 10 recommendations aimed at improving oversight, financial reporting and compliance. Town officials said they did not dispute the findings and have begun taking corrective action.
The town board is now required to submit a corrective action plan within 90 days outlining how it will address the issues identified in the audit.
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