Moravia village trustees lacked a complete picture of village finances because the treasurer failed to record and report millions of dollars in receipts and transfers, while required annual audits had not been performed, a state review found.
Auditors identified more than $16.8 million in unrecorded transfers out and more than $11.8 million in unrecorded receipts and transfers in. They separately traced approximately $27.2 million in transfers across the village’s 29 bank accounts and determined the money appropriately went to other village accounts.
The Oct. 9 report from the state comptroller’s office described accounting and reporting failures that weakened financial oversight. Its transfer review did not identify money diverted outside village accounts.
The audit covered June 1, 2023, through July 15, 2026. Mayor Christopher Fulton said officials had changed accounting practices, added money for professional assistance and used a CPA to correct capital project and annual report errors.
Transfers were made without complete accounting
The unrecorded and unreported activity identified by auditors occurred from June 2023 through August 2025 and affected the general, water, sewer and capital projects funds.
Most differences arose when money belonging to another fund was initially deposited into the general fund bank account. Examples included grants, state aid and credit card payments for water and sewer bills.
The treasurer did not record and report the initial receipts and subsequent transfers in the funds where they occurred, auditors said. That prevented the records from showing the full movement of money and increased the risk that improper transfers could escape detection.
The report’s comparison for the 2023-24 and 2024-25 fiscal years showed $22.4 million in receipts and transfers in on bank statements, compared with $10.5 million in the treasurer’s reports. Bank statements showed $22.4 million in transfers out, compared with $5.5 million reported.
Those figures describe incoming and outgoing transaction activity, including movement among village funds, and cannot be combined into a total of missing money.
The treasurer prepared monthly bank reconciliations, but they were not always accurate. Some failed to document differences or included transactions outside the month being reconciled.
Fulton told auditors he reviewed statements and reconciliations, but there was no documentation of his review.
Trustees lacked regular budget comparisons
The treasurer did not regularly provide reports comparing actual receipts and spending with the budget.
She had not entered the detailed budget into the accounting software, preventing the system from generating those reports. She told auditors that preparing them manually was time-consuming and that she generally did so during budget development.
That left trustees without the information needed to routinely monitor spending against the village’s financial plan.
The village budgeted $2.7 million in general, water and sewer spending for 2025-26. It also had a wastewater treatment plant improvement project estimated at $25.5 million, adding to the importance of reliable capital project accounting.
Auditors sampled 237 disbursements totaling $573,488 to determine whether they were properly recorded and reported and found no exceptions in that testing.
Annual reports were late and inaccurate
The village’s 2024-25 annual financial report was filed 115 days after an extended deadline. Both that report and the 2023-24 filing failed to agree with village financial records.
One omission involved $163,875 in capital projects accounts payable that was left out of the 2024-25 report. The treasurer told auditors she forgot to include it and was having difficulty with capital project accounting. The village hired an accountant to assist her.
The mayor and treasurer said the treasurer’s records had not received an annual audit since 2017. They and two trustees said they were unaware of the annual audit requirement.
Auditors said a required board audit or review by an independent public accountant might have detected and corrected the problems sooner.
Village describes accounting changes
In his Sept. 28 response, Fulton said Moravia revised how it reports transfers involving an investment account and water and sewer payments, updated bank reconciliations and changed monthly reporting practices.
The village also added a budget line for CPA services and an agreed-upon procedures review. Fulton said the accountant had corrected capital project records and annual report errors and would provide annual assistance. He said officials attend municipal training and would submit a more detailed corrective action plan.
The report made six recommendations addressing financial records, reconciliations, monthly reports, annual filings, training and annual audits.
The findings concern a separate issue from the village’s purchasing practices. FL1 reported in September that another audit found more than $1.3 million in Moravia purchases lacked competitive bidding, selection or quotation records.
The comptroller called for a corrective action plan within 90 days and encouraged the village to make it available at the clerk’s office.
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