The board of trustees has been faulted in a report released this week by the state comptroller's office for problems relating to the financial affairs of the village court.

But village justice Enid Hinkes and the board of trustees appear to differ in how those problems should be resolved.

Hinkes said the problems the comptroller's office found in the audit "no longer exist" in the court and since hiring a new clerk, the financial records and procedures have been put in order.

"The change in court clerks and the return of supervision of the court clerk from the village to the court were simple solutions, but effective," she said.

The village, however, is trying to follow recommendations from the comptroller's office and finds itself at odds with Hinkes and the state office of court administration.

In a summary of findings from an audit of the village justice court covering the period of Jan. 1 to Dec. 6, 2004, the comptroller's office found that village officials did not institute a system of internal controls to ensure the proper handling of financial transactions and provide sufficient oversight.

Last September, the mayor and board responded to preliminary audit findings and recommendations from the comptroller's office with a series of steps they would institute to bring the village into compliance.

According to the mayor and board, changes were put in place, but some of them no longer are being adhered to.

One of them was a procedure that involved the treasurer's office in the handling of court moneys to segregate the duties of the court clerk. The move was made so that no one person is in charge of all phases of a financial transaction.

That was changed, however, when Hinkes attended a seminar and was told by representatives from the NYS office of court administration that no one except the judge or court clerk should handle the money because they are responsible for it.

Hinkes admitted that what the office of court administration and the comptroller's office are recommending are at odds when it comes to handling money in a small justice court.

"I take my marching orders from the office of court administration," Hinkes said Wednesday morning.

The difference of opinion between the two state agencies is frustrating, says mayor Carol Waller.

"They [comptroller's office] give you a recommendation and you try and do it, but you can't," she said. "My hands are totally tied."

Another area of contention is access to the court's records so that they may be audited periodically by the board of trustees.

Hinkes said she and the board agreed last fall to audit the court books every quarter to make it easier than once a year. She said she was turning over the financial information, but has since stopped because the records were included in the board of trustees' meeting packets and made much too public.

"Their actions were totally irresponsible," she said. "The records were for financial purposes only. They were not to be used to review what the court does. When they misused it, I said they're not going to get it anymore."

Hinkes said she did not comply with a request from the finance committee to see the books on March 30 when she believes they knew she would be out of town. If they had asked to see them on another mutually agreed upon date she would have provided them, she said. Hinkes added that she would not have a problem with periodic examination of the court's books, but it has to be done with more courtesy and not simply a demand to see them on a date of the board's choosing.

The law requires the court to turn over its records once a year to be audited by the board of trustees and Hinkes said she will comply with that.

"I have nothing to hide. I know what they're trying to do. They're trying to make the court look bad," she said.

According to the comptroller's audit report, village officials did not establish controls that would make certain:

• transactions were recorded and reported accurately and in a timely fashion;

• cash was deposited in a timely fashion; and

• records properly account for all cash receipts and disbursements.

Additionally, trustees failed to exercise sufficient oversight and control over the work of court officials and employees.

"In fact, the justices told us that they were unaware of certain financial expectations placed upon them, such as the necessity to perform periodic reconciliations and maintain certain types of records," the report states. "Consequently, these weaknesses have contributed to significant deficiencies relating to recordkeeping, monthly reconciliations, segregation of incompatible duties, and the annual audit functions."

The report also states there were "significant weaknesses" in the court's internal control system:

• the justices and court clerk did not perform periodic reconciliation of court cash assets with known liabilities. On Oct. 31, 2004, justice Kelly's available cash assets exceeded liabilities by $322.46. On the same day, justice Enid Hinkes liabilities exceeded her cash assets by $508.75. Assets should always equal liabilities.

• the court clerk did not always prepare accurate bank reconciliations.

• the court clerk performed all the court's financial duties. An effective system of internal control distributes duties so that no one individual controls all phases of a transaction.

• village justices did not submit their records for audit at least once each fiscal year.

• court personnel did not issue receipts for all parking ticket fines received. Additionally, there were six instances, involving $700 in fines for traffic tickets for which receipts were not issued. In the review of 487 receipts issued during the period, there were 27 receipt numbers missing making it impossible to determine if all moneys were properly recorded and deposited.

• court personnel did not maintain detailed listings of restitution and pending bail owed to and being held by the court. This, the auditors believe, lead to the discrepancies between the justice's assets and liabilities.

• neither the justices nor the court clerk received adequate training on the financial aspects of court operations. Both justices told the auditors that as a result of the lack of training, they were unaware of certain recordkeeping requirements. "We believe the lack of adequate training has directly contributed to the deficiencies listed above," the report stated.

The audit of the village court was part of a larger, regional audit of 12 justice courts in Delaware, Otsego, Sullivan and Broome counties to identify areas where local governments can improve their operations, according to a letter from assistant comptroller Steven Hancox.

"Our goals are to develop and promote short-term and long-term strategies to enable and encourage local government officials to reduce costs, improve service delivery and to account for and protect their entity's assets," Hancox wrote.

In its report, the comptroller's office suggested that in the case of small justice courts, it may make sense to remove the job of cash collection from the courts or to combine operations among smaller courts to create fewer, larger operations that could segregate duties.