After Audit, Finance Department Promises To Address Its Finances

The city's Department of Finance is pledging to improve its oversight practices after an audit found it could not account for $14.1 million in court revenues.

The audit, released by the state comptroller yesterday, indicated that an antiquated accounting system had resulted in serious discrepancies on the department's books. A bank account for court funds is short $10.8 million, while another account for bail funds has an unexplained surplus of $3.3 million.

City courts collect hundreds of millions of dollars in bail, court-ordered payments, and funds from public estates, which they then forward to the finance department for safekeeping. The audit claims that the cash in the department's bank accounts does not match up to figures kept on separate ledgers.

Both the comptroller's office and the finance department blamed the problem on an unreliable and inaccurate accounting system.

"These discrepancies have existed for years, and it is virtually impossible to untangle these records, some of which are hand written receipts from the courts," Comptroller Thomas DiNapoli said in a statement. "The city must pursue a long-term solution to replace its outdated accounting system and tighten controls over these funds."

The finance commissioner, Martha Stark, said she is installing a new computer accounting system that will be operational by January.

"While this has in no way affected our ability to give people the money they are entitled to, it is clear we must replace our antiquated mainframe system with new technology," she said in a statement.