Commission officials are effectively managing financial operations. The Board and managers have developed a framework for the five key systems to effectively manage financial operations. We commend Commission officials for implementing adequate controls over budgeting, billing, cash receipts, purchasing and cash disbursements to provide for the effective management of the Commission's financial operations.

We found that the Board and District officials have established adequate online banking internal controls to ensure sufficient protection of the District's assets. The Board adopted an online banking policy that authorizes the Treasurer and Deputy Treasurer to perform online banking transactions with the oversight of the Business Manager. The District's banks only allow transfers to be made between accounts at the same bank. If the Treasurer initiates a wire transfer to an external bank account the bank calls the Business Manager for approval before processing the transaction. The District's internal procedures also require the Business Manager or Superintendent to sign-off on a transfer of moneys form, indicating approval prior to the transfers being initiated. We reviewed online banking transfers and wires for two months and found that all 35 transactions were approved by the Business Manager or Superintendent prior to transmission. Furthermore, both of the District's banks send the Treasurer an email confirmation when a transfer is completed.

We found that BOCES can manage its software more effectively and efficiently. The Communication and Technology Services (CaTS) and Assistive Technology departments maintained incomplete software inventory lists that did not contain all software programs used by BOCES staff or identify the number of purchased licenses for each installed program. In addition, the CaTS department did not formalize a plan or practice to regularly review BOCES computers to ensure that installed software is appropriate and properly licensed. As a result, we identified 62 software applications with 139 installations on BOCES computers that were not business- or academic-related, including coupon applications and those related to gaming. Also, we found that for 264 installations of 21 programs installed on BOCES and/or participating district computers, BOCES either did not have an adequate number of licenses for these installations or did not have sufficient documentation to provide evidence that it had purchased licenses for these installations. However, we commend BOCES officials for achieving cost savings by entering into an agreement with a software provider that has resulted in an estimated annual savings of $22,000.

We found that the Treasurer does not prepare monthly financial reports for distribution to the Board for its review. Therefore the Board cannot properly monitor actual revenues and expenditures with the adopted budget. Furthermore, the Director and Board President receive quarterly budget-to-actual reports from the Buffalo and Erie County Public Library System (System), but these reports only include System-paid expenditures and are not distributed to all Board members. A senior clerk updated a spreadsheet of Library revenues and expenditures monthly. This spreadsheet was shared with the System, however, it was not reviewed by anyone at the Library. In addition, although the Board appoints a Treasurer annually, it has not outlined the Treasurer's duties in the bylaws, as required by the Handbook. Therefore, the Treasurer was not aware that she should be preparing a monthly financial report, or that the System sent a quarterly report to the Director.

We found that although the Board has developed a procurement policy, the corresponding regulations do not provide adequate guidance for seeking competition when procuring professional services. The regulations do not indicate when, or at what monetary threshold, it is appropriate to use written request for proposals, written quotes or verbal quotes. Additionally, although the policy does require documentation be maintained, the corresponding regulations do not outline the specific documentation requirements to be used during the solicitation process, including documentation for the decisions made. We reviewed the District's procurement of services from 21 professional service providers totaling $1.3 million. We found the District properly sought competition for seven providers, with total expenditures of $820,953, including the procurement of the District's external auditor as required by law. However, the District did not properly seek competition for 14 professional service providers totaling $477,235.

The current Supervisor did not maintain accurate and complete accounting records or ensure that the Board was provided appropriate financial reports. Additionally, the failure to correct accounting errors in a timely manner and poor accounting records have created an environment where the Board cannot effectively assess or monitor the Town's financial condition. For example, the current Supervisor made adjustments to the accounting records, including cash and fund balance accounts, during 2012 in an attempt to correct errors. As a result, improper transfers of over $125,000 were made among Town funds. The current Supervisor also did not record the independent auditor's adjustments of more than $188,000 in a timely manner to correct receipts that were misclassified between the general town-wide and the highway part-town funds causing taxpayer inequity. These adjustments included a 2012 audit adjustment of approximately $165,000 and a 2013 audit adjustment of approximately $23,000 that was not recorded in the accounting records until February 2015. Finally, the current Supervisor did not maintain trust and agency fund records in 2012 or 2013. In addition, the current Supervisor did not accurately record trust and agency activity from January 1 through April 30, 2014, record any such activity after April 30, 2014 or compare the accounting records with the reconciled bank balances. As of December 31, 2014, funds held in the trust and agency bank account totaled approximately $20,000.

We commend the Board for establishing and implementing strong internal controls over the Authority's billing and collection process. The controls in place include formal and informal procedures that provide adequate supervision and guidance to Authority staff involved with generating monthly bills, collecting payments, preparing bank deposits and reconciling customer accounts.

The District should improve controls over payroll disbursements. District officials did not adequately segregate payroll duties or establish sufficient compensating controls. The Deputy performed all steps in the payroll process, which included entering and modifying employee information, salary information, payroll deductions and withholding amounts in the District's accounting software program. In addition, the Deputy prepared the monthly payroll account bank reconciliations. All the disbursements we reviewed were made to bona fide District employees and accurately calculated in accordance with applicable collective bargaining agreements and Board approved pay rates. Generally, payroll withholdings were accurate. However, because District officials did not establish adequate internal controls over payroll and allowed the Deputy to control all facets of the payroll process without appropriate oversight, there remains a risk that errors or inappropriate transactions could occur and not be detected or corrected in a timely manner.

The District's controls over the activity fund were not operating effectively. The Board did not ensure that District officials implemented and enforced its policy governing the operations of the activity fund. Consequently, we found that 27 of 30 collections totaling $20,029 that were remitted to the central treasurer for deposit did not have adequate supporting documentation. In addition, six of seven student treasurers' ledgers did not agree with the central treasurer's ledger. The failure to maintain and oversee the activity fund in accordance with the Board's policy increases the chance that extra-classroom activity money could be lost or misused.

The purpose of our audit was to assess community colleges’ compliance with safety reporting requirements established under the Clery Act for the period January 1 through December 31, 2013.

District officials enacted budgets with planned operating deficits and used approximately $1.9 million of fund balance to finance District operations in fiscal years 2011-12 through 2013-14. The Board and District officials initiated actions to reduce expenditures and maintain financial stability beginning in the 2012-13 fiscal year. The Assistant Superintendent for Business projected 2014-15 year-end unrestricted, unappropriated fund balance to be approximately $2.7 million, or 4 percent of the next year's budget appropriations, which is the maximum allowable by law. We reviewed budget-to-actual results for fiscal years 2011-12 through 2013-14 and found that the Board adopted budgets with realistic revenue and expenditure estimates. However, the Board has relied on appropriated fund balance as a financing source in the annual budgets, which reduced the District's unrestricted, unappropriated funds during that period. As a result, the District used approximately $1.9 million of fund balance during the last three fiscal years. The Assistant Superintendent for Business stated that the District increased the amount of fund balance and reserves used to balance its annual budget because of the New York State property tax cap and reduced State aid funding levels. However, officials expect that the District's unrestricted fund balance will return to the maximum permitted by law at the end of the 2014-15 fiscal year.

District officials need to improve their oversight of fuel use. Despite the use of a fuel management system, District officials do not review system activity reports to identify anomalies regarding quantities dispensed, fueling times and the odometer readings entered by employees. We found eight instances where the fuel volume dispensed exceeded the vehicle's tank capacity or a reasonable volume given the amount of miles driven between fill-ups. We also identified 140 instances where fuel was dispensed without an odometer reading and 26 instances where the odometer readings for vehicles were less than the previous readings for those same vehicles. Further, District officials do not reconcile fuel purchases to fuel use and remaining fuel or maintain an accurate list of assigned fuel keys and vehicles. In some instances, fuel key and vehicle numbers are not unique and no logs are maintained to document the purpose each time a master key is used. Master fuel keys were used in 376 transactions to dispense 4,075 gallons of fuel. Finally, the Director of Facilities and Operations does not maintain a log of fuel usage for the 275 gallon diesel tank in his Department which had deliveries totaling $6,326 during our period or have knowledge of who was reordering the fuel for that tank. As a result, the District cannot properly account for how much fuel is pumped into specific vehicles and by whom.

The claims auditor is responsible for reviewing the claims to ensure they have adequate support and proper approvals, and that the purchases are for a proper District purpose. The claims auditor stamps each claim to show her approval and certifies the warrants to authorize the Treasurer to pay the claims. The claims auditor provides the Treasurer with the claim packets and the warrants. The Treasurer returns the claim packets to the Central Business Officer and keeps the approved warrant on file. The accounts payable clerk mails out the check payments. The Treasurer does not oversee the application of her signature on checks or compare checks to the warrant prior to issuance. Consequently, there is an increased risk that improper disbursements or payment errors could occur.

Payroll duties are not adequately segregated and there is no periodic management review of transactions, certification of payrolls or review of leave records. The Board also did not clearly document its authorization of compensation for all Village employees. As a result, Village officials could not provide documentation showing the Board's authorization for $15,309 of the Clerk-Treasurer's salary, and the former Clerk-Treasurer was overpaid $10,638 for a separation payment. In addition, seven employees received payments that were not authorized by the Board, totaling $5,091. The Clerk-Treasurer did not maintain adequate leave records for herself and for fiscal year 2013-14, five employees received less sick leave than the Board authorized. The Department of Public Works Superintendent also prepared and approved his own leave-time slips with no oversight. The Board also did not properly audit claims to ensure they were adequately supported or were for proper Village purposes. The Clerk-Treasurer does not present the Board with abstracts or claims for capital project funds. One Board member reviews and approves any capital project claims related to construction costs. Without a thorough and deliberate examination of the individual claims and the supporting documentation, the Board does not have enough information to determine whether the claims it approves are appropriate and legitimate and there is an increased risk that improper claims could be paid.

The Board did not adopt, review, update or enforce adequate financial policies to ensure Town resources were protected. In fiscal years 2012 through 2014, the Board adopted budgets with inaccurate revenue and appropriation estimates to generate operating surpluses so that the Town could purchase equipment and make capital improvements. However, a more transparent way of planning for such items would be to establish reserve funds and include provisions in the budget for their funding. The Board also did not audit the books and records of any of the Town officers and employees that handled cash. In addition, the former Clerk did not routinely issue duplicate receipts for every transaction where no evidence of receipt was available, record daily cash receipts properly or make deposits intact. As a result, we identified a cash shortage of $465, of which the former Clerk − through substitution or theft − took $209 in cash. In addition, we found the former Clerk did not deposit tax receipts in a timely manner, and both Clerks did not remit tax payments to the Supervisor in a timely manner. We found the former Supervisor's records and reports were inaccurate because his bookkeeper did not properly record cash receipts and disbursements and made adjusting journal entries that exacerbated the problem instead of correcting the errors. We also found that the Code Enforcement Officers did not issue receipts for collections, maintain records for all issued building permits or collect all fees as required. Finally, we found the Justice did not retain copies of receipts issued for court-related activities.

The Supervisor's prior bookkeeper, who retired effective December 31, 2014, used manual accounting records which were accurately maintained. Upon her retirement, the Supervisor hired two interim bookkeepers. As of May 18, 2015 monthly bank statements for 2015 were not reconciled and the accounting journals and general ledger were not posted except for the original budget entries. In addition, the Board has not received any monthly reports since February 2015. The Supervisor informed us that the new bookkeeper who was hired April 13, 2015 will be transitioning the Town records from a manual system to an automated software to improve efficiency and controls. The Supervisor plans to have monthly reports to the Board by June 2015.

Although the Board approved lists of vendor claims that were prepared by the Analyst, it did not complete a proper audit of the claims from vendors prior to paying those vendors from either the operating account or the private funds account. In addition, although the Library has accumulated over $762,500 in private funds as of the end of 2014, it has no formal written plan to use the money. The Library maintains approximately $627,000 in mutual funds, fixed income securities and cash equivalents with two investment brokerage firms; these are improper investments at unauthorized financial institutions. Finally, the Board failed to review the bank statements, bank reconciliations and investment statements of the private funds. As a result, there is an increased risk of loss on investments, including principal, and that errors fraud or abuse could occur without detection.

The City Manager prepared and the Council adopted general fund budgets that were not realistic and based on historical trends and/or prior year actuals for the years 2012 through 2014. The general fund budgets also relied on the appropriation of fund balance to finance operations. City officials did not maintain the City's accounting records or prepare the adopted budgets in accordance with the Uniform System of Accounts. The Council also did not receive adequate information to monitor the budget, and City officials did not make budget modifications in a timely manner. In addition, City officials did not implement corrective action on similar findings previously identified through their annual independent audits. As a result, the City's general fund experienced large unplanned operating deficits leading to its diminished financial condition in recent years. Although City officials have recently implemented some improved budgeting practices and certain cost savings measures, additional cost savings and revenue enhancement opportunities exist. Finally, City officials did not establish adequate multiyear plans.

District officials have not effectively managed fund balance as unrestricted fund balance annually exceeded statutory limits (projected to exceed by $4 million as of June 30, 2015) and reserves are overfunded by approximately $3.2 million. This occurred because District officials consistently overestimated expenditures by a total of $8.5 million over the four-year period ranging from 7 to 14 percent more than actual expenditures. Although District officials adopted budgets which included appropriated fund balance, the total appropriated fund balance was not needed because of their overestimation of expenditures. Despite the excess unrestricted fund balance, District officials continued to raise taxes each of the four years.

The Board and District officials did not effectively manage the fund balance of the general fund. As a result, the District had unrestricted fund balance in the general fund totaling $670,000 or 6.2 percent of the following year's appropriations as of June 30, 2014 and reserve fund balances that increased by almost $2 million (131.1 percent) from 2009-10 through 2013-14. If the real property tax levies remained at the level of the 2009-10 fiscal year, the total taxes paid would have been $1.1 million less than the amounts actually paid, while still generating more than $270,000 in surpluses. Although the general fund's fund balance was over the statutory limit and several reserves were overfunded, the Board continually adopted budgets that included tax levy increases that were not necessary. As of the end 2013-14, the general fund's unrestricted fund balance was 6.2 percent of the ensuing year's appropriations. While the Board has adopted budgets that included an average use of more than $570,000 in fund balance for each of the last five fiscal years, operations have generated a combined surplus of more than $1.3 million during the same time.