Fund balance is up, and so are cyber attacks, city auditor says
Although there were no “reportable findings” from the city’s 2021-22 audit, that doesn’t mean the municipality is out of reach from a dangerous situation, Matt Montalbo says.
Cyber security — or a lack thereof — is a “pretty substantial” item for the city’s checklist, Montalbo said during an audit presentation Monday at City Hall.
The world is rife with Internet scams, and no one is immune, he said.
“I want to highlight some pretty substantial challenges that governments are seeing right now, one being related to cyber security risks and the risks of being subjected to a cyber attack,” he said. "So A lot of the associations related to government entities … they partnered together and put out a cybersecurity primer back in February of 2022, just to highlight how significant government entities are being targeted in cyber attacks. They put out a lot of statistics just to educate those charged with governance.
“So we have that in our management letter, as it’s just an additional precaution to look at cyber security risks, and almost kind of do a mock scenario where, if you were subjected to a cyber attack, what processes do you have in place? You know, how prepared are we because, really, the statistics are pretty staggering,” he said. “It’s not a matter of if it's going to happen, it's a matter of when, so be as prepared as possible is what we would recommend.”
That is perhaps no startling news, as cyber attacks have been fairly ubiquitous to our high-tech times.
Still, Montalbo, a certified public accountant with the city’s new auditing company Drescher & Malecki, strongly suggested that the city needs to assess its own cyber risks, related processes, and what measures may need to be taken to bolster the cyber fence to keep predators out.
Batavia may be a small city, but according to governing.com, the amount of data that municipalities deal with has grown exponentially, but smaller entities often operate on a shoestring budget, meaning they rarely have dedicated cybersecurity experts and instead rely on their IT team to ensure security. Not having and investing the required funds to prevent cyber attacks can often leave local municipalities more vulnerable, the site states.
City Manager Rachael Tabelski was not surprised by the warning and auditor’s findings, she said. The city has an ongoing process that includes a system in place for safeguards against cyber crimes, she said.
“The City has NYS training in place for cyber security for employees, and works hard to remain diligent to constant email threats of phishing and other scams,” she said to The Batavian Tuesday. “We work with our independent IT consultant, Alternative Information Systems, for a variety of security functions and monitoring to help keep city assets safe. We are always looking to add new security measures to our IT systems to better protect the city.”
A second area for caution was the influx of pandemic-related monies being given to municipalities, especially “a lot through the stimulus plans out there,” he said.
“So the American Rescue Plan, the Cares Act, there are a lot of new opportunities, but with that comes a lot of challenges, in not only understanding the compliance requirements for these funds, but also tracking and monitoring the statements,” he said. “Just looking at how you're set up to do that, whether you have a grant administration function or the ability to monitor those new fundings as well as the current funding going on.”
City Council previously agreed to add the position of a grant administrator, and the city is in progress with seeking candidates for the job.
Montalbo, who was with senior accountant Erica Handley, shared the city’s financial picture, which included a $1.3 million fund balance increase. For once, the word COVID carried a positive connotation.
“Your fund balance went from about $808 million at this point in 2021 to $9.4 million at the end of 2022. You did have, and we've been seeing these trends across the state, your sales tax come in a little bit higher than anticipated. We saw a little bit of the economic recovery after the COVID years,” he said. “So that bump is pretty consistent with the trends we're seeing statewide. You also were able to have some budgetary savings within your public safety and transportation areas … So that was the main reason for the increase, and your total fund balance being that $9.4 million.”
Photo: New city auditors Matt Montalbo and Erica Handley of Drescher & Malecki present the city's 2021-22 audit report during Monday's conference session at City Hall. Photo by Joanne Beck.
