District officials made purchases of goods and services totaling more than $1 million from 10 vendors during our audit period that exceeded the statutory bidding threshold. We found that District officials did not consistently adhere to bidding or competitive offering requirements when procuring goods and services that cost more than the statutory bid threshold. As a result, we question whether the best price was obtained for more than $1.6 million of purchases made. We also found that the Board did not ensure that the Treasurer properly accounted for cash collected and needs to improve its internal controls over cash disbursements. The Treasurer's office did not maintain a record of all funds received. Additionally, the Treasurer deposited 44 checks totaling more than $72,000 from 12 to 196 days after the dates indicated on the checks. Finally, while cash disbursements were properly accounted for, the Board did not ensure that the duties within the Treasurer's office were adequately segregated and did not implement compensating controls.

The Board-adopted 2012-13 through 2014-15 general fund budgets were not structurally balanced because the Board routinely relied on significant amounts of appropriated fund balance to finance operations. The Board also did not adopt a policy establishing the level of unrestricted fund balance that should be maintained for any unanticipated expenditures and/or revenue shortfalls. As a result, for the 2012-13 and 2013-14 fiscal years the general fund incurred operating deficits totaling more than $1.9 million. As of June 30, 2014 the Districts unrestricted fund balance was $287,901, which was 1.4 percent of the ensuing year's appropriations. The District's financial condition will likely decline further if the Board continues to adopt budgets that are not structurally balanced. Further, if no action is taken to address shortfalls in estimated revenues for the 2014-15 fiscal year and control expenditures, the District will have a deficit fund balance as of June 30, 2015. If these trends continue, the District will incur fiscal instability that will negatively affect future District operations.

The Board did not establish adequate internal controls over District operations. There is a lack of sufficient policies and procedures to guide employees in the performance of their jobs. The duties related to billings, collections and record keeping were not adequately segregated. In addition, the Board did not approve water billings or customer account adjustments or perform an annual audit of the clerk's records and reports. Furthermore, the clerk did not maintain adequate customer records or records of billings and collections. As a result, the Town may not be collecting all the revenue to which it is entitled.

We randomly selected three months and reviewed all 145 claims paid during those months totaling $227,176 from the general, water and highway funds. Except for minor discrepancies that were communicated to Town officials, the Board conducted a deliberate and thorough audit of vouchers, the vouchers contained adequate supporting documentation and evidence that the goods or services were received and the vouchers were for legitimate Town purposes. We commend Town officials for designing and implementing this system of controls over the approval and payment of vouchers.

The Board does not provide adequate oversight and management of the Town's finances. Although the accounting records list 19 reserves totaling $657,700 there are no policies or procedures for reserves and the Town is not properly accounting for the reserves within the operating funds that financed them. In addition, the Town does not budget to fund reserves and several reserves have not been properly established, may not be authorized by statute or have a purpose that is unclear. The Board has also not established a budgeting policy, and has consistently underestimated revenues and overestimated expenditures within the town-outside-village funds and has continued its poor budgeting practices through 2015. Furthermore, the Board did not create a comprehensive, multiyear financial or capital plan and did not audit the books and records of the Supervisor. In addition, the Board does not adequately oversee and monitor the operations and finances relating to the provision of Town ambulance services. For example, although revenues and expenditures for the Town's ambulance service function average $127,000 and $123,000 per year, a formal policy has not been developed for the billing, collection and enforcement processes, including the maintenance of an accounts receivable ledger. Further, the ambulance service operates, in several respects, as an independent entity, with its own bylaws, rather than as a Town department.

The Board did not audit and approve any claims during the audit period. Instead, it entrusted the Director to audit and approve claims. The Board, in accordance with its bylaws, delegated the Library's treasury duties to the Director who was responsible for signing all checks, unless a payment totaled more than $1,000. While the Director audited and approved certain types of Library claims, she generally indicated such approval by placing an asterisk on the claims. However, an asterisk does not provide sufficient evidence of approval because it could easily be applied by anyone and does not sufficiently identify the approver, as a signature or initials would. Additionally, the Director did not indicate the date of approval on the claims. In addition, the Clerk did not provide the Board with an abstract listing each sequentially numbered claim, documenting the vendor or claim amount. Instead the Clerk gave the Board a monthly general ledger that showed the check date, check number, payee name, a brief payment description and the payment amount after the claims had already been paid. Informing the Board about claims paid after the fact prevents the Board from properly reviewing the claim before payment is made and precludes the Board from denying a claim's payment.

The Board needs to strengthen internal controls to help ensure that water user charges are properly billed, collected, recorded and deposited. Although water rent revenue totals approximately $450,000 per year, the Board did not adequately segregate financial duties or provide sufficient oversight of billing, collecting and recording of water payments and adjustments to customer accounts. The Deputy Clerk is responsible for preparing customer water bills (which are reviewed by the Town Clerk). However, the Deputy Clerk is also responsible for receiving and recording customer payments, applying penalties to overdue customer accounts and making adjustments in the computerized billing system. The Town Clerk and Supervisor also collect and post customer water payments. All three have administrative access rights in the computerized water billing system, which allow them to adjust customer accounts, even though the Deputy Clerk is designated to record adjustments. There is no review or prior approval required for adjustments to be made in the system. In addition, although the computerized water billing system can generate an adjustment report (log) of user's transactions to identify any potential improper adjustments, it is not reviewed by anyone at the Town.

During the audit period, the Board did not properly allocate the Town's sales tax revenue to the part-town general or part-town highway funds. Instead, the Board consistently allocated sales tax to the town-wide general fund prior to allocating the sales tax to the part-town funds. We also found the Board adopted budgets with unrealistic estimates of revenues, expenditures and the amount of fund balance to be used to finance operations in the part-town highway fund.

We found that the Clerk-Treasurer was not meeting the fundamental expectations of his duties. The Clerk-Treasurer provided the Board with budget-to-actual and incomplete fund balance reports each month which did not enable it to properly oversee the Village's financial activities. Further, the value of these reports was greatly diminished because accounting records were not accurate and bank reconciliations were not performed for all accounts in a timely manner. While the Board has contracted with a certified public accountant to perform an annual audit of the Village's financial records, it is not completed in a timely manner because the inaccurate financial records have delayed it. Further, the Village has not filed its annual update document with the Office of the State Comptroller within the required timeframes. Also, the Clerk-Treasurer did not adequately segregate the financial duties within his office. In addition, the Justices and Board did not ensure that parking tickets were collected, recorded and deposited in an accurate manner. The Court Clerk performs the collection, deposit, reconciliation and enforcement of parking ticket fines with no mitigating controls in place. Furthermore, no one reconciles the tickets issued by the Police Department to the tickets recorded and filed by the Court. While we found immaterial errors with the $5,800 in parking ticket collections we reviewed, we found that 12 uncollected parking ticket late fees totaling $860 had inadequate or no documentation to support why the late fees were not collected. We also found that 74 unpaid tickets issued during our audit period, with fees totaling approximately $7,000, remained outstanding by an average of 181 days.

The Board did not provide adequate oversight and did not establish appropriate internal controls over the Department's financial activities. The Department's bylaws provide very limited guidance regarding the Board's responsibilities and the Treasurer's duties. In fact, one of the bylaws' few specific financial requirements is the adoption of an annual budget at its October meeting. However, prior to our audit fieldwork, the Board had not proposed and the membership had not approved an annual budget. In addition, the Board had not adopted written financial policies or procedures addressing cash receipts, disbursements, purchasing or claims processing and approval. Absent detailed guidance, the Board had not taken steps to adequately segregate the Treasurer's duties or provide adequate oversight of the Treasurer. The Treasurer makes all deposits, disburses cash without the Board's prior approval and performs all recordkeeping functions without adequate oversight. Further, we found that while Board members review most of the bills, they typically do so after the payments have already been made, and their approval is not documented in the minutes. Lastly, the Board did not conduct an annual audit of the Treasurer's records.

The Board needs to improve its claims auditing procedures. We found the entire Board did not authorize payment of claims by resolution, but instead allowed claims to be paid before its meetings after approval by any three Commissioners. The Board also did not require the Treasurer to provide it with an abstract listing all the claims, which the Commissioners could then review and compare with the individual claim vouchers when performing the claims audit. We found no evidence documented in the Board minutes that the Board approved an abstract before the Treasurer paid the February and March 2014 disbursements. The Board also needs to improve controls over payroll to ensure that pay rates are properly authorized and time and attendance is properly recorded. During 2013, salaries and wages totaled about $455,600 or 18 percent of total District budget appropriations. However, District officials were unable to provide any documentation showing Board approval for the 2013 salary and wage increases for six District employees. In 2014, District officials gave 3 percent raises to all District employees without Board approval and no documentation was maintained to determine if the Board approved the Treasurer/Secretary's annual $65,000 salary. Finally, while the District has a time clock system, not all District employees were required to use it or sign and certify that the hours reported on the time cards was accurate.

The School's Business Manager and Office Manager are responsible for most of the financial transactions. However, procedures have been structured so that the Office Manager and the Business Manager serve as a check on each other's work. In addition, the Director, Administrative Assistant and Board members provide additional oversight. These independent checks serve to mitigate the risk of errors or irregularities in most aspects of the School's cash disbursement processes. However, we found that the School could strengthen controls over payroll transfers and journal entries.

District controls were not adequate to ensure that financial activity was properly recorded and reported and that District moneys were safeguarded. As a result, the former Treasurer misappropriated $9,224 in District funds and made an additional $709 in questionable payments to her husband. The former Treasurer misused District funds by writing herself extra salary payments, paying for personal items with District funds and issuing checks for a variety of unsupported payments made either to herself or her husband. Reimbursements by the former Treasurer amounted to $748 at the completion of our fieldwork. The former Treasurer was able to use District funds inappropriately because the Board did not provide adequate oversight of her duties. The Board failed to properly segregate her duties or establish mitigating internal controls. On September 24, 2014 the former Treasurer was charged with grand larceny in the third degree for stealing from the District.

The purpose of our audit was to determine if local government officials’ use of municipal resources resulted in an effective enforcement of the Fire Code (i.e., fire safety of buildings) within their jurisdictions for the period January 1 through December 31, 2013.

The Supervisor relied on the CPA to maintain the Town's accounting records without providing any oversight, resulting in the Town not having accurate, complete and up-to-date accounting records. Furthermore, the CPA erroneously commingled debt and grant proceeds totaling $1,866,359 for capital projects with the Town's operating funds. Therefore, debt proceeds of $115,906 were not used as intended or reserved for future debt repayment, capital projects were overexpended by $169,500 and the water districts' debt of $166,617 was improperly paid by the general fund. The Supervisor provided the Board with financial reports that were not accurate and reflected fund balances that were significantly different than what was actually recorded in the Town's accounting records. For example, the total fund balance as of December 31, 2013 was approximately $326,000 less than what was reported to the Board and the total fund balance as of December 31, 2014 was approximately $173,000 more than what was reported to the Board. In addition, the Board did not annually audit, or cause to be audited, all of the Supervisor's records, as required. The Board did contract with the CPA to audit water districts #2, #4 and #5 for 2012 and 2013. However, because the CPA provided accounting services to the Town for the same years, we question the CPA's independence to perform these audits.

The Board did not provide adequate oversight and management of the Village's financial operations. It did not conduct or provide for an annual audit of the Clerk-Treasurer's books and reports, which places the Village at an increased risk of errors and irregularities that go undetected and uncorrected. In addition, the Board did not adequately monitor the financial condition of the Village's funds. As a result, at the end of the 2013-14 fiscal year, unrestricted fund balance in the main operating funds was excessive, equivalent to 90 percent of budgeted appropriations in the general fund, 137 percent in the water fund and 110 percent in the sewer fund.

The Board's consistent practice of appropriating fund balance to finance recurring annual operations, along with significant unplanned costs to repair the Village's water tower, have caused substantial financial decline in both the water and sewer funds. The Board also adopted budgets that appropriated more fund balance than was actually available in the water fund to finance operations for the 2013-14 and 2014-15 fiscal years. Furthermore, the water fund balance went into a deficit position at the end of the 2013-14 fiscal year because of the Board's reliance on appropriated fund balance to fund operations. The declining financial position of the water and sewer funds have also caused each fund to rely on loans from the general fund to pay their obligations. This will negatively impact the general fund if additional loans are necessary, or the water and sewer funds are unable to repay their loans. Lastly, the Board has not developed multiyear plans, which would have allowed for better planning to ensure adequate revenues would be available to finance recurring costs. Such plans also could have helped to prevent the water and sewer funds' financial decline.

Overall the Board properly managed the Town's finances. However, we identified improvement opportunities and areas the Board should continue to monitor. For example, the Supervisor indicated that he and the Board did not use the prior years' budget versus actual operating results when preparing and adopting the budget, but primarily relied on the prior years' budgets. As a result, budget estimates did not closely mirror actual revenues and expenditures and the Board appropriated more fund balance than necessary each year to fund the next year's operations. In addition, from 2009 through 2014, the Board consistently relied on fund balance to finance a portion of highway fund operations by appropriating approximately $75,000 each year. As a result, unexpended surplus funds decreased from more than $331,500 as of January 1, 2009 to less than $110,000 as of December 31, 2014. Although the highway fund appears to have a reasonable amount of unexpended surplus funds (more than 16 percent of the 2015 adopted budget), because the Board continually relied on fund balance to fund highway operations the highway fund's financial condition could eventually deteriorate. The Board appropriated $50,000 of fund balance to finance a portion of 2015 highway fund operations.

Based on the results of our review, we found that the significant revenue and expenditure projections in the adopted budget are reasonable. The adopted budget relies on a 16 percent property tax increase to finance the general fund budget deficiencies because there are no other sources available to reduce the property tax levy, such as fund balance. The Board of Trustees has adopted rate increases of approximately 5 percent in water and sewer rents because the revenues generated have not been sufficient to finance yearly appropriations. The sewer fund budget also includes proceeds of bonds totaling $1,262,500. Village officials have stated that they plan to issue deficit financing bonds to alleviate the unassigned deficits in the operating funds. The adopted budget for 2015-16 has an approved tax levy of $10.54 million, representing an increase of $1.4 million or 16 percent over the 2014-15 levy. The Board adopted a local law which allows the Village to override the tax levy limitation.

The purpose of our audit was to assess municipalities’ compliance with their Parkland Alienation legislation for the period January 1, 2011 through December 31, 2013.