TOWN OF HEMPSTEAD
INDUSTRIAL DEVELOPMENT AGENCY
-2010-
ASSESSMENT OF EFFECTIVENESS OF INTERNAL CONTROL STRUCTURE AND PROCEDURES

	The mission of the Town of Hempstead IDA is to grow business and enhance job creation within its jurisdiction.  The IDA seeks to accomplish these goals through the incentives authorized by the General Municipal Law.  These include property tax reduction through “Payments in Lieu of Taxes” (PILOTS) as well as exemption from both sales taxes to a project’s construction and development costs and the New York State Mortgage Recording Tax.

	The IDA can provide assistance in both “straight lease” transactions with conventional financing or through bonds.  IDA involvement in a project enhances the economic health of a wide range of private sector institutions beyond the benefits extended to the particular applicants.  These include the financial sector, construction industry, employment with jobs of every categorization and the impact that such economic activity has on businesses that interact with the subject business.

	The internal controls structure and procedures of the Town of Hempstead IDA are reviewed by the staff as well as by our independent accountants annually.

	The report is the result of extensive discussions and review by our accounts who present a detailed questionnaire that addresses every aspect of IDA operations.  Each of the IDA staff members and the Chairman of our Investment and Audit Committees respond to the inquiries by our accountants who then independently evaluate our operation and comment upon it in the annual report.

	As part of its ongoing self analysis of its operations, the IDA staff re-evaluated internal control procedures to ensure that a clear delineation of responsibilities was incorporated into all operations.  These discussions and findings were reviewed by both board members and the IDA’s independent auditors. For example, IDA investments are placed in various financial institutions in CDs.  The administration of that cash and all checking is the responsibility of the Agency Administrator.  The CEO independently  reviews all investments at financial institutions to insure that the accounts square with the office accounts.  On an ongoing basis, the CEO reviews bank submissions to make sure that the collateral pledged to secure IDA deposits provides adequate security.

Furthermore, the staff discusses financial operations on a weekly, if not, more frequent basis.  All expenditures are submitted by staff to the board for approval by resolution.  Low cost purchases are itemized and these items, which normally include supplies (pens, paper, water cooler) are paid by check as well as pursuant to a standing resolution approved by the board. The CEO reviews all such payments made by the Agency Administrator.

	The staff constantly updates the projected revenues and expenditures as well as the overall budget to ensure that the filings are consistent with the projections made prior to the fiscal year.

	The Investment Chair is provided with all financial claims, payments and budget updates on a regular basis.  The Investment Committee and each of the IDA Board members are presented with all such budgetary materials prior to each of its monthly meetings.  Minor expenditures are explained pursuant to the standing resolution and specific expenditures are each approved by the board by resolution.

	Any and all purchases of services and larger items are conducted pursuant to the IDA’s Purchasing/Procurement Policy and Guidelines.

	The Investment Policy is conducted pursuant to the resolutions enacted by our board and the laws of New York State that regulate governmental authorities and municipalities.  Income generated is invested solely in prudent institutions, which are commercial banks, presently, that offer the highest rate of return.  Hence, such investments are fully protected against loss and constitute what can only be categorized as the lowest level of risk.  The CEO periodically updates the rates offered by each of the commercial banks to guarantee the highest rate of return.  Principal is reinvested periodically to reflect such fluctuation in the rates.

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