State auditors found serious weaknesses in financial oversight in the towns of Rose and Portage, including millions of dollars in transactions that weren’t entered into Rose’s accounting software and more than $23,000 in unauthorized payments to Portage’s highway superintendent.
Separate August reports from the Office of the New York State Comptroller concluded that supervisors in both towns failed to maintain complete, accurate and up-to-date accounting records and reports. Auditors said the lack of oversight left the respective town boards without reliable financial information and increased the risk that errors, irregularities or misuse of public money could go undetected.
The audits examined similar responsibilities but uncovered different problems. In Rose, auditors found $4.9 million in revenues and $4 million in disbursements weren’t entered into the town’s computerized accounting system over most of 2024 and 2025. In Portage, auditors found a bookkeeping firm exercised broad control over financial functions without sufficient oversight, resulting in unsupported financial reporting and unauthorized payments totaling $23,034.
Both towns agreed that changes were needed and told the comptroller’s office they were taking corrective action.
Rose left most transactions out of accounting software
The Town of Rose audit covered Jan. 1, 2024, through April 21, 2026, and focused on whether the town’s supervisors maintained complete, accurate and current accounting records and reports.
Rose, which has about 2,300 residents and a 2026 budget of approximately $2.5 million, relies on an appointed clerk to the supervisor who serves as the town’s bookkeeper.
Auditors found the former and current supervisors delegated significant financial responsibilities to the bookkeeper without providing adequate oversight.
The scale of the accounting backlog was substantial.
Between Jan. 1, 2024, and Dec. 31, 2025, auditors found $4.9 million in revenues and transfers into town accounts and $4 million in disbursements and transfers out weren’t entered into Rose’s computerized accounting software.
Only financial activity from January 2024 and January 2025 had been entered.
The bookkeeper told auditors she had been correcting errors in 2023 records created by the previous bookkeeper and was unable to enter most of the 2024 and 2025 information.
Instead, the bookkeeper used bank statements, abstracts and deposit records to prepare monthly reports through a spreadsheet. But auditors found that system created its own problems.
The spreadsheet was overwritten each month, meaning historical information wasn’t preserved electronically. Auditors also found the monthly reports overstated revenues by $14,095 and disbursements by $212,431 during the two-year period because transfers weren’t always properly recorded.
The reports also lacked budget-to-actual information that would have allowed the Town Board to track spending against adopted appropriations.
Monthly bank reconciliations weren’t prepared.
Auditors said the result was that Rose officials lacked a reliable picture of the town’s true financial position.
Rose annual reports were years behind
The audit also found Rose failed to meet state requirements for filing annual financial reports with the comptroller’s office.
The town’s 2023 report wasn’t filed until October 2025 — 580 days after the statutory deadline.
As of April 21, 2026, Rose’s annual financial reports for 2024 and 2025 had not been filed.
Auditors said the current supervisor, who took office Jan. 1, retained the same bookkeeper and accounting processes, leaving the town’s computerized records incomplete and outdated during the early months of 2026.
Town officials told auditors they were working with an outside accountant to update the books and complete the delinquent reports.
Claims weren’t properly audited before payment
Auditors also reviewed 100 non-payroll disbursements totaling $68,196 from November 2024 and November 2025.
All 100 lacked evidence that the Town Board had audited and approved the underlying claims before payment.
Three board members told auditors they approved bills from an abstract — essentially a list of payments — and believed reviewing the individual supporting claims wasn’t necessary.
Six payments totaling $3,518 weren’t included on an abstract at all.
Twenty-five payments totaling $9,976 lacked adequate supporting documentation. Auditors said they couldn’t determine whether six of those payments, totaling $597, were for reasonable town purposes because documentation was insufficient.
Some involved mileage reimbursements without a documented purpose or purchases from vendors that could also sell items for personal use.
Three reimbursements totaling $256 were paid to town officials or employees without adequate documentation or explanation.
Auditors separately examined Rose’s bank accounts and found no transfers to non-town bank accounts.
Payroll review found errors affecting 18 Rose employees
Payroll oversight was another concern.
The former supervisor told auditors he reviewed employee timecards but didn’t compare them against payroll records prepared by the bookkeeper, review payroll changes or formally certify payroll before payment.
Auditors reviewed December payrolls from 2024 and 2025 covering 36 officials and employees.
They found 18 people were inaccurately paid a combined $611.
That included a zoning board member who received $369 without documentation showing the Town Board had appointed the person to the position or authorized the compensation. Seventeen other employees were collectively paid $242 incorrectly.
The comptroller recommended that the supervisor provide stronger oversight of the bookkeeper, approve online bank transfers before they occur, ensure monthly bank reconciliations are completed, provide the board with complete financial reports, file overdue annual reports and verify compensation before certifying payroll.
Rose says corrective work is underway
Town Supervisor Christine Rice told the comptroller’s office that Rose didn’t dispute the audit findings and had begun taking corrective action.
Rice said the town obtained additional training for its accounting software and that the 2024 annual financial report had been completed before a July 29 exit conference with auditors.
The bookkeeper was working to reconcile 2025 records and submit that year’s report, Rice said.
She also said the town was using budget-to-actual comparisons to monitor the 2026 budget, reviewing financial policies and strengthening its internal controls.
Rice attributed some payroll discrepancies to rounding errors caused by a calibration problem in the accounting system and said the problem had been corrected.
She also said monthly supervisor reports had been printed and reviewed by town officials even though the electronic versions weren’t retained.
The comptroller’s office pushed back on part of that response, stating that the financial data maintained in Rose’s software and spreadsheets and reported to the board was inaccurate, incomplete and outdated, hindering the board’s ability to monitor operations.
Portage audit finds $23,034 in unauthorized payments
The Town of Portage audit covered Jan. 1, 2024, through May 4, 2026, with auditors extending portions of their review further back to examine annual reports and unused leave payments.
Portage, located in Livingston County, had approximately $1.1 million in budgeted appropriations in 2025.
The town contracted with a bookkeeping firm to record transactions, prepare checks, make transfers, process payroll, maintain accounting records and produce monthly financial reports.
Auditors concluded the town supervisor provided insufficient oversight of that firm.
The bookkeeping firm determined when bank transfers should occur and made the transfers without the supervisor’s approval. The firm also processed payroll without the supervisor certifying it.
The supervisor didn’t review accounting journal entries, bank reconciliations or payroll records.
Auditors said that lack of oversight allowed $23,034 in unauthorized payments to the highway superintendent to go undetected.
Vacation payouts and salary overpayment questioned
The $23,034 consisted of $15,034 for 580 hours of unused vacation leave and an additional $8,000 beyond the superintendent’s approved 2024 salary.
The unused vacation payments were split between 2023 and 2024, with $7,517 paid each year for 290 hours.
The bookkeeping firm couldn’t provide support for the additional $8,000 salary payment.
When asked about it, the supervisor told auditors, “I don’t know anything about it.”
The highway superintendent told auditors that after being elected to the position, he requested payment from the Town Board for unused vacation accumulated while he had worked as a highway department employee.
But auditors found no evidence in board meeting minutes showing the Town Board discussed or approved the payout.
Two board members who served in 2023 also told auditors they couldn’t recall approving it.
The town’s employee handbook described how much vacation employees could earn but didn’t authorize cash payments for unused accrued leave.
Auditors calculated that the superintendent could have earned a maximum of 496 vacation hours during his eight years as a highway department employee — 84 fewer than the 580 hours for which he was paid.
Neither the superintendent nor the bookkeeping firm could provide records supporting the unused leave balance. Auditors said the town didn’t maintain leave records for employees.
The comptroller recommended that the Town Board review the overpayments and pursue reimbursement when appropriate.
Portage supervisor burned bank statements
Auditors also found significant weaknesses in Portage’s record retention practices.
The town supervisor told auditors he burned bank statements after reviewing them because he didn’t believe they were needed.
He also provided revenue documentation to the bookkeeping firm and relied on the firm to maintain financial records.
The bookkeeping firm told auditors some original supporting documentation had either been shredded or returned to the town.
State auditors said the supervisor was responsible for maintaining and protecting town records for required retention periods regardless of whether financial duties had been outsourced.
Auditors reviewed about $2 million in transfers among Portage’s eight bank accounts from January 2024 through October 2025 and didn’t identify inappropriate transfers.
They nevertheless said allowing bookkeeping employees to make transfers while also processing payroll and disbursements created an increased risk that improper transactions could occur without detection.
Accounting method hid nearly $95,000 balance
Auditors also found Portage’s bookkeeping firm maintained the town’s routine accounting records on a cash basis instead of the modified accrual basis required for governmental funds.
That contributed to financial reports that didn’t accurately show the town’s financial condition.
One example involved a “trust and agency” bank account carrying a $94,949 balance at the start of 2024 that town officials weren’t aware could be available for operations.
Most of that balance — $85,743 — came from American Rescue Plan Act funding received in 2021 and 2022 that hadn’t been properly recorded or reflected in monthly reports.
Two bookkeeping firm employees couldn’t explain the source of the remainder of the original balance.
Portage overspent budget lines
The bookkeeping firm did prepare monthly budget-to-actual reports showing appropriations that had been overspent.
But auditors found the supervisor didn’t bring proposed budget transfers to the Town Board before expenditures exceeded available appropriations.
Instead, officials waited until the end of the year for the bookkeeping firm to recommend transfers.
The board approved $284,650 in year-end budget transfers for 2024.
Even after those adjustments, auditors found 15 budget lines remained overdrawn by another $19,375.
The comptroller said allowing spending beyond appropriations without first transferring available money undermined the town’s budget controls.
Annual reports late and inaccurate
Portage’s annual financial reporting also drew criticism.
The town’s annual reports for fiscal years 2021 through 2024 weren’t filed until June 2025. The 2025 report was filed on time.
Auditors found, however, that some figures in the 2023 and 2024 reports weren’t supported by the underlying accounting records or documentation.
The 2024 annual report overstated revenues by $68,481 and understated disbursements by $25,651.
One bookkeeping employee told auditors mistakes were made when reporting accounts receivable, accounts payable and prepaid expenditures.
Portage board plans investigation
The Portage Town Board agreed with the comptroller’s recommendations and said the audit revealed a need for stronger procedures and oversight.
Board members said they would improve their monitoring of the bookkeeping firm, require supervisor authorization of bank transfers, limit the firm’s online banking access, improve annual report preparation and require review and sign-off of payroll.
The board also said the vacation payouts and 2024 overpayment to the highway superintendent would require an internal investigation because board members lacked sufficient visibility into the transactions.
Two of the board’s current four members, Robert Gelser and Margaret Terry, took office in 2026 and weren’t serving during the bulk of the audit period. Board members Tom Allen and Dustin Shepard served during the period examined.
The board said it plans to use the 90-day corrective action period to make procedural changes and prepare for a new town supervisor taking office in 2027.
The comptroller issued eight recommendations to Portage, including stronger supervision of the bookkeeping firm, better retention of financial records, supervisor approval of bank transfers, timely budget amendments, accurate annual reports, formal payroll certification and a board review of the identified overpayments.
Both Rose and Portage are expected to prepare corrective action plans addressing the audit findings and provide them to the comptroller’s office within 90 days.
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