We found that the Clerk did not deposit all money collected. As of June 23, 2014, she had a shortage totaling $3,147. In addition, the Clerk did not record, deposit or remit money collected in an accurate and timely manner. We also found that the Board did not provide adequate oversight of the Clerk's operations and did not conduct a thorough audit of the Clerk's records. As a result, Town money was misappropriated.

We found that the town-outside-village operating fund balances were reasonable and the Board's budget estimates for revenues and expenditures were generally reasonable for all funds. However, because the Board did not fully understand the impact of appropriating fund balance each year, fund balance for both of the town-wide (TW) operating funds combined experienced significant declines over the last three years totaling about $463,316. The TW general fund ended 2013 with an unrestricted, unappropriated fund balance of $2,683 and the TW highway fund ended the year with an unassigned fund balance deficit of $75,952. The Board adopted budgets that relied too heavily on appropriated fund balance as a financing source and appropriated more fund balance than it had available. Additionally, the Board has not developed a fund balance policy to determine the amount of fund balance to maintain or multiyear financial and capital plans to address the Town's long-term priorities. As a result, the Town's ability to react to external influences, provide basic services and plan for capital needs is diminished.

The Board did not effectively oversee the Town's financial operations. The Supervisor did not provide the Board with adequate monthly financial reports. In addition, the Town's procedures for auditing claims were not in compliance with Town Law. Furthermore, the Board did not annually audit or cause an audit of records and reports of all Town officers or employees who received or disbursed moneys on behalf of the Town. As a result of these deficiencies, there is an increased risk that inappropriate payments or irregularities could occur and the Board's ability to effectively monitor the Town's financial operations is diminished.

The Justices do not provide adequate oversight of Court operations to ensure the accurate and complete collection, deposit, recording and reporting of Court moneys in a timely manner. The Justices have not adequately segregated the duties of the clerks and do not regularly review accounting records, bank statements, or monthly reconciliations and accountability analyses. Although the Court issues computerized receipts, the receipt numbers, dates and amounts can be altered or deleted in the computer system and the Justices do not review system activity as a compensating control. Further, 71 receipts were not deposited within 72 hours of receipt and various receipts or transactions were deleted from the system without a valid documented reason. Finally, the Justices have not developed a policy or procedures to enforce collection of unpaid fines and fees. As a result, 34 unpaid tickets were not submitted to the Department of Motor Vehicles (DMV) to be scofflawed and five tickets were incorrectly reported as disposed of to the DMV. Due to these control weaknesses, it is impossible for the Justices to hold any clerks responsible for any errors, deficiencies or fraudulent or abusive activities that may occur and the Court is not collecting all potential revenue.

Internal controls over the claims audit process were not appropriately designed. The Board assigned the responsibility to audit and approve claims for payment to the Board President. This is not a good practice because the entire Board is not auditing or approving claims. Further, while the account clerk prepares an abstract of claims for the Board, the abstract does not include payments made in advance of the Board President's audit and approval, and the Board does not take any action to approve the abstract. Also, the Director is paying various claims in advance of audit and approval for payment; however, the Board did not pass a resolution authorizing the payment of eligible claims in advance of audit. We reviewed 177 payments totaling $309,724 and found that all payments were for purchases that appeared to be for appropriate Library purposes and were supported by itemized invoices. However, 49 claims totaling $83,757 did not include signatures from the Director or department heads to indicate the goods or services were actually received.

The Board has not established adequate policies and procedures or provided guidance on maintaining a reasonable level of fund balance. As a result, the Village has accumulated excessive fund balance in its general fund that resulted, at least in part, from unrealistic budget estimates. Specifically, over the past eight years, the Village's fund balance has ranged from approximately 25 percent to 52 percent of the next year's budgeted appropriations. In addition, the Board has not developed a long-term financial or capital plan or established reserves to help address the Village's future needs.

The Board did not properly oversee the Town's financial operations. The Board and Town officials have not developed multiyear financial plans, policies, or procedures to govern budgeting practices or the level of unexpended surplus funds to maintain. Lacking an established financial plan and budgetary guidance, the Board adopted budgets that were not based on sound and realistic estimates of revenues and expenditures and appropriated fund balance based on the former Supervisor's estimates without ensuring funds were available. Poor budgeting, along with overspending in the highway fund, has caused cash flow problems, which required interfund transfers and advances from the general fund to pay bills over the last several years. The Board's continued reliance on using money from the general fund to pay highway fund bills has caused the Town's overall financial condition to be volatile in the last four years. Finally, the Board has not provided sufficient oversight to Town departments collecting and disbursing cash by performing an annual audit.

The Supervisor did not maintain accounting records. Specifically, general ledgers, receipt and disbursement journals, subsidiary revenue and expenditure ledgers and cash account balances were not maintained. As a result, the Supervisor was unable to prepare monthly bank reconciliations or provide the Board with complete and reliable financial reports. Additionally, 88 disbursements totaling approximately $68,300 were made either without proper supporting documentation or Board authorization and an accurate 2013 annual financial report was not filed with the Office of the State Comptroller. Further, the Board did not adequately oversee the Supervisor's financial duties to properly monitor and manage financial operations and assess the Town's financial condition. The Board also did not annually audit the Supervisor's records or develop and implement policies and procedures over its budgeting practices and the level of fund balance to maintain. As a result, cash at the end of 2013 totaled $689,998 or more than twice the 2014 Board-adopted budget and the Board may have raised more real property taxes than necessary to finance Town operations. Finally, the Town purchased an engine for a highway vehicle from the Highway Superintendent for $1,300, which created a conflict of interest.

The Board has not provided adequate oversight to safeguard Town assets. Specifically, the Board did not adopt structurally balanced budgets. As a result, in each of the fiscal years 2011 through 2013, the general fund had available fund balance that was more than 90 percent of the ensuing year's budget and the highway fund had available fund balance that was more than 50 percent of the ensuing year's budget. These fund balances are excessive. The Board did not audit any claims from the general fund, water district and street lighting fund. As a result, we found that eight disbursements totaling $13,563 were lacking supporting documentation to determine they were appropriate Town expenditures. In addition, the Board did not audit the books and records of any of the Town officers and employees that handled cash. Finally, the Town's lack of policies and procedures also allowed deficiencies to occur without detection in cash receipts and disbursements.

The Town's general, sewer and water funds all had a deficit fund balance at some point during the period from 2009 through 2013. The general, water and sewer funds all had accumulated fund deficits for fiscal years 2009, 2010 and 2011. While Town officials were able to improve the fiscal stability of the general fund during this period, which reported a positive accumulated fund balance in 2012 and 2013, the sewer and water funds still had accumulated fund deficits in 2012. The sewer and water funds had accumulated deficits from 2009 through 2012. The Town reported marginal positive accumulated fund balances of $23,442 and $8,967, respectively, for 2013. While Town officials were able to eliminate accumulated fund deficits in these funds by the end of 2013, officials have not developed a multiyear financial plan to assist them in monitoring operations and guarding against future operating deficits.

We were unable to determine if all collections were recorded and deposited in a timely manner and intact. This was because Library officials have not established formal policies or procedures for handling and recording cash receipts. As a result, the Library did not always ensure that adequate documentation was maintained to verify that all collections were recorded and deposits were made timely and intact. In addition, the Budget and Finance Committee did not audit monthly revenues, to confirm that moneys were accounted for.

The Board-adopted budgets during our audit period included overestimated expenditures and appropriated fund balance that was not actually used to finance operations. As a result, in 2011-12 and 2012-13 the District accumulated fund balance that exceeded the amount that may be carried over into the next school year. The excess fund balance was more than 16 percent of the next year's budgeted expenditures for both years and District officials did not use any of this excess to reduce the real property tax levy for the 2012-13 or 2013-14 fiscal years. Additionally, for fiscal years 2010-11 through 2012-13, the Board-adopted budgets included about $1.45 million of appropriated fund balance. However, about $30,000, or 2 percent, was actually used to finance District operations. Further, although District officials reserved money to prepare for future contingencies, funding of reserve funds was not included as an appropriation in the budgets voted on by taxpayers. Instead, District reserve funds were funded by unrestricted fund balance determined by the Board at the end of each fiscal year. The taxpayers did approve the establishment of a building repair reserve. Although the Board prepared its budgets without using a multiyear financial plan, District officials initiated preliminary work on such a plan before we completed our audit fieldwork.

The purpose of our audit was to determine whether law enforcement agencies have established appropriate controls over property room inventory for the period January 1, 2012 through December 5, 2013.

City officials need to improve internal controls over employee time and attendance records and payroll processing. Because the Council has not adopted policies related to payroll and the City Comptroller has not established standard procedures for all departments concerning the recording and reporting of payroll, employee accruals were not charged correctly for time taken; two employees were overpaid and one employee was underpaid. In addition, some employees were not required to maintain any form of documentation supporting hours worked. Therefore, City officials have no evidence that $53,339 of payments made to 15 employees were necessary or accurate. Without effective internal controls over the payroll process, there is an increased risk that employees will be paid for time they may not be entitled to.

Village officials did not adequately monitor financial operations to ensure fiscal stability. The Village has experienced unplanned operating deficits in its water and sewer funds for the last two years. These deficits were caused by inaccurate budget estimates and the lack of monitoring financial operations throughout the year. As a result, the general fund advanced funds to the water and sewer funds to pay for operational costs, which could not be repaid in a timely manner. Village officials did not properly address and account for the inability of the water and sewer funds to repay temporary interfund transfers from the general fund. Because the advances to the water and sewer funds were not likely to be repaid within one year, these advances should have been considered long-term receivables. This would have required an adjustment of the unassigned fund balance in the general fund from $660,019 to $219,045 for fiscal year 2012-13 and from $591,302 to $30,943 for year ended 2013-14. In addition, at the end of the 2013-14 fiscal year the Village did not have enough available cash to pay vendors and payroll was being advanced by its bank. The Board also needs to improve its oversight of water and sewer operations. The budgets in both the water and sewer funds were not based on realistic revenues and water and sewer rates were not sufficient to cover anticipated expenditures. In addition, the Village has experienced large amounts of unaccounted-for water and billing practices do not provide a system in which users are equitably charged based on usage. Because of these factors, the water and sewer funds have regularly experienced operating deficits and continue to rely on general fund transfers. Water and sewer user rates do not generate sufficient revenues to pay the total costs of operating and maintaining the facilities and service lines.

The Board should improve its policies and procedures over cash receipts and disbursements to ensure that all receipts are properly billed and accounted for and disbursements are for proper Village purposes. Additionally, the Board did not conduct the required annual audit of the Clerk-Treasurer's financial records. As a result, errors and irregularities could occur and remain undetected and uncorrected, putting the Village's financial resources at a significant risk for loss or abuse.

The Justices did not ensure that Court funds were properly recorded, deposited and reported. The clerk performs incompatible duties related to cash receipts, and the Justices do not provide oversight of the clerk's work. As a result, the Justices were unaware that the Court had an outstanding balance of $837 in June 2014 due to mistakes made by the clerk in the monthly Justice Court Fund report and accounting records. Because of this lack of oversight, the Court has an increased risk that errors and irregularities could occur without detection, which puts public resources at risk.

The Board established controls to ensure that financial activity is properly recorded and that Company money is safeguarded. However, certain controls are not operating effectively. The Board established adequate procedures over receipts, such as having at least three members count and sign off on cash collected at fund-raising activities, before turning over the cash to the Treasurer for deposit. Further, at least two Board members review the bank statements for reasonableness of deposits and they compare check images to supporting documentation (such as invoices) monthly at the meetings. While the Board established procedures over disbursements, weaknesses were found in the process. Although all purchases were generally approved by the membership or Board, including purchases exceeding $1,000, the Board did not ensure that all disbursements were properly supported at the time of their review and approval. In addition, the receipt records available do not allow the Board to know how much was collected from donations and other revenue sources.

We found the Town improperly budgeted and allocated its sales tax revenue. The Town and the Village receive separate sales tax distributions from the County. However, Town officials did not allocate the sales tax revenue to the town-outside-village funds to reduce the real property tax levies in these funds before allocating any remaining sales tax revenue to the town-wide funds. As a result, approximately $188,000 in taxpayer inequities occurred from 2011 through 2014. Specifically, from 2011 through 2013 Town officials allocated all of its sales tax revenues totaling more than $143,000 to the town-wide general fund, while having real property tax levies in both of its town-outside-village funds. This practice continued in the 2014 fiscal year for which the Board again accounted for about $44,200 in sale tax revenue in the town-wide general fund. The Town's method of allocating sales taxes is not in compliance with statute. As a result, Town taxpayers with real property located in the Village received an extra benefit from the sales tax distributions at the expense of taxpayers with property located outside the Village.

The purpose of our audit was to determine if fire districts and municipalities were awarding Length of Service Award Program (LOSAP) service credits to volunteer firefighters accurately for the period January 1, 2012 through March 31, 2014.