The financial mess left by Bemus Point’s former village clerk and treasurer is worse than originally thought.

Jennifer Jaeger, former Bemus Point village clerk, was arrested in February 2021 for the alleged theft of more than $60,000 in village money.

But an audit released Friday by state Comptroller Thomas DiNapoli went into further detail, saying a full audit of $2.1 million in transactions found property tax payments that were paid more than once without refunds issued to taxpayers, unfiled payroll tax documentation that have already resulted in fines against the village with more possibly owed and 19 separate recommendations for the Village Board and current clerk-treasurer to take to prevent future theft from happening.

Bryan Dahlberg, Bemus Point mayor, wrote a short reply to the Comptroller’s Office in response to the audit.

“We are in receipt of the draft from the audit conducted,” Dahlberg wrote. “We agree with the findings and are prepared to take the suggestions in the report and put them into practice in our Village of Bemus Point office.”

UPON FURTHER

EXAMINATION

DiNapoli, District Attorney Jason Schmidt and Sheriff Jim Quattrone announced charges against Jaeger in February 2021 when it was found she had allegedly stolen more than $60,000 in village money. The audit released Firday detailed exactly how the theft occured.

Jaeger had issued checks to herself without Village Board approval for payments that weren’t supported. For example, she paid herself:

¯ $19,357 for unknown reasons.

¯ $11,372 to reimburse herself for village expenses she claimed she paid with her personal money. The clerk-treasurer had no receipts to document what, if anything, was purchased. For example, she reimbursed herself $1,436 for fire department expenses but a fire department official confirmed this was not a legitimate expense.

¯ $5,593 for training expenses, including mileage to training, hotel stays and class fees. However, she did not attend any training events.

¯ $3,612 for unused vacation time. However, she was not eligible for paid vacation time and the vVillage does not pay employees for vacation time they do not use.

¯ $2,204 for mileage reimbursement. However, she had already been reimbursed for mileage through the village’s regular claims payment process around the time these checks were issued.

In December, she pleaded guilty to a charge of petit larceny and paid restitution to the village.

Such theft was possible, DiNapoli’s office said, because the board hadn’t performed a proper audit or a proper claims audit. DiNapoli said $564,682 for 450 payments were not listed on warrants, another $21,908 for 93 payments did not agree with the amounts on the warrants, a $355 utility payment paid to the clerk/treasurer; 154 payments totaling $456,508 for 154 payments made prior to a board meeting that weren’t property included on subsequent warrants for board review and approval, and 51 warrants that lacked claim numbers, check numbers or account codes.

Auditors noted Jaeger provided them with altered warrants. Auditors received electronic warrants on Sept. 28, 2020, that had been edited on Sept. 25, 2020, all within a 12-minute timeframe. Those altered warrants, the audit states, totaled $7,937 in additional money to Jaeger.

“The clerk-treasurer was able to conceal her questionable activities by initiating disbursements, approving payments and issuing checks, because the board and the mayor failed to provide proper oversight and implement adequate controls,” the auditors wrote in their report. “No one other than the clerk-treasurer received or reviewed bank statements or canceled check images. Therefore, basic internal controls were absent and there was no one to mitigate the risk of unauthorized transactions, errors and/or irregularities occurring and going undetected.”

The audit also found six years of inflated payroll payments totaling $26,867 because Jaeger was able to review and process payroll, including her own, without oversight.

Jaeger didn’t properly report property tax collections, reporting $604,181 in property tax payments from June 2016 through September 2020 but showing collections based on the bank account detail of $617, 643. Auditors report Jaeger had improperly placed 30 properties with tax bills totaling $9,594 on unpaid lists sent to the county each year for a re-levying of property taxes, but all 30 property owners’ payments had been deposited into the village’s checking account — meaning they paid their tax bills twice and were not refunded. Another eight property tax payments totaling $2,973 were paid twice and not refunded.

“Neither the mayor nor the board reviewed the clerk-treasurer’s cash receipts activity,” the audit noted. “We question whether all receipts intended for the Village were properly deposited and accounted for. The Board did not adopt written cash receipt policies, ensure cash receipts duties were properly segregated or provide adequate oversight of the clerk-treasurer. As a result, the clerk-treasurer had complete control over the cash receipts process and the Board cannot be sure that all money collected was recorded and deposited.”

DiNapoli’s audit also found Jaeger also didn’t file payroll tax reports or remit payments totaling $40,837. As a result, Bemus Point was assessed penalties and interest of $18,100.

The former clerk also did not properly deposit, record or report taxes collected or issue duplicate receipts or maintain other adequate supporting which meant auditors couldn’t determine whether all money collected was deposited. Jaeger also allegedly didn’t properly record revenues and expenditures, which DiNapoli’s auditors said resulted in misstated actual financial results. Lastly, the audit noted Jaeger hadn’t provided written financial reports to the Bemus Point Village Board or file annual financial reports with the state Office of the State Comptroller as required for four years.

“The failure to file AUDs inhibits the board, village residents, OSC and other interested parties from monitoring the village’s operations and financial condition,” the audit stated. “As such, the board’s ability to make informed decisions and manage village operations is impaired. Failing to file for four consecutive years calls into question the financial standing of the village and the effectiveness of the management of the village in general. Had the board taken a more active role in its responsibility for managing the village’s operations, it may have discovered or prevented the deficiencies included in this report.”

RECOMMENDATIONS

DiNapoli’s first recommendation is to evaluate the audit and work with lawyers, county officials and any applicable state and federal agencies to determine whether property tax overpayments, underpayments or duplicate payments should be rectified and the best ways to do so. Also, the audit recomemnds finding out if payroll taxes are still owed to state and federal agencies.

Auditors then suggest the board make sure the clerk-treasurer’s duties are segregated to keep one person from controlling all phases of a transaction, perform proper claims audits, annual audit clerk-treasurer’s records, ensure payroll is reviewed by someone independent of payroll processing and ensure monthly reports are submitted. There are also recommendations for the clerk-treasurer to implement.

The audit recommends the village maintain complete, accurate and proper accounting records and implement compensating controls, including adequate oversight and audit the clerk/treasurer’s records as required.