OWASCO -- An independent audit indicates a weak system of checks and balances may have encouraged malfeasance at Owasco town hall during 2006.

Unauthorized payments to the former bookkeeper, accounting records kept at a private residence, unsupported adjustments to water bills and missing records were listed in a report offered by Cuddy & Ward to the town board Thursday. The findings follow the public revelation that both state police and the state comptroller's office are investigating town business.

Failure to keep an inventory of town property, allowing months to pass without reconciling bank accounts, writing checks out of sequence and issuing blank checks may have invited fraud, the audit suggested. Partner Richard Ward said some records were so erroneous or incomplete, the Auburn accounting firm could not verify financial statements.

"In order to have accurate financial reports, these items need to reconciled monthly," Ward said, noting many basic accounting practices had not been followed. "You'd rather catch those errors immediately than four months down the road."

The audit found statements that did not match bank records, water accounts that were adjusted without explaination and improperly recorded transactions that lopsided the general fund as well as water and sewer accounts. The board went into executive session to discuss three of the audit findings that center around the high-turnover bookkeeping position.

Read the full report in Friday's edition of The Citizen.