The Clerk did not always record, deposit, disburse and report all moneys collected in a timely and accurate manner. The Clerk recorded cash receipts received in the accounting system, but did not compare the collections to bank deposits, which would have identified more than $10,000 in tax moneys and $1,030 in Clerk fees that were deposited but not recorded. As a result of neglecting to record the $10,000 in tax collections, the Clerk incorrectly issued delinquent tax notices to six taxpayers and sent one of these taxpayers' accounts to the County for enforcement. In addition, the Clerk did not perform any bank reconciliations or monthly accountabilities. Consequently, the Clerk was unable to account for approximately $5,029 remaining in the tax collector bank account after the 2014 tax settlement. Although we were able to identify the source of $4,054 of these funds, the Clerk's cash exceeded known liabilities by $975 as of June 30, 2014. Also, the Clerk did not always deposit moneys in a timely manner or adequately secure cash collected prior to deposit.

We verified the relevant factors used to calculate the invoiced amounts to all eight school districts of residence and did not identify any discrepancies in the School's calculations. We also verified that those billed amounts were received and recorded. However, we found that $5,629 was not received from one school district for a student; this billing was in dispute. The student had three different addresses during the school year but the parent/guardian could not locate or obtain proof of address − such as a lease agreement from the landlord − for one school district. The school district refused to pay the bill without proof of residence. As such, the School did not collect $5,629 for the time period when the student purportedly resided in this school district. Had the School required proof of address when the student's address changed, this likely would not have happened.

The purpose of our audit was to determine if towns properly maintained their roads for the period January 1, 2013 through May 1, 2014.

District officials have taken appropriate action to ensure the accuracy of compensation and benefits provided to employees. They were proactive in establishing effective payroll-related policies and procedures. For example, timekeeping and payroll procedures require multiple levels of approval, and wage tables are input by employees outside of the payroll process. In addition, many duties within the payroll process have been segregated. For example, computer access levels to various payroll-related accounting functions have been limited to those employees who require access to perform their job duties. Timekeeping and supervisory functions are also segregated from payroll processing functions. Except for some minor discrepancies, the compensation and benefits provided to employees matched Board-approved contracts and collective bargaining agreement stipulations. We commend the District for effectively designing and implementing policies and procedures that ensure the accuracy of compensation and benefits provided to District employees.

The Board did not adopt adequate procedures for processing tenant rents collected to ensure payments were safeguarded and deposited in a timely manner. Authority officials need to improve internal controls to better safeguard these receipts. We found the duties within the Authority's office were not adequately segregated and the compensating controls put in place were insufficient. Additionally, receipts were not issued to apartment complex tenants for rent collected and rent money was not adequately secured in the Authority's office. Further, the assistant had full access rights within the Authority's computerized rental collection accounting program and was also responsible for reviewing audit trail reports. Finally, rent payments paid in cash totaling more than $4,400 were deposited five or more business days after they were collected. As a result of these weaknesses, errors may occur go undetected and remain uncorrected.

The District did not have any written procedures outlining how user access rights should be established or modified. District officials designated the Assistant Business Administrator as a financial system administrator even though she is not independent of the financial recordkeeping functions. Therefore, the Assistant Business Administrator has unrestricted access to all functions within the financial software package. She can add new users to the system, create and change user access rights and can make or delete evidence of payments without restriction. In addition, the purchasing agent has access to modules of the financial software package that are not consistent with her job duties. We also found that the purchasing agent has access to the payroll module of the financial software system.

The Town's accounting records were not adequately maintained. This precluded the current and former Comptroller from providing the Board with complete and accurate monthly financial reports and preparing and filing an accurate 2013 annual financial report (AUD) with the Office of the State Comptroller. As a result, the Board's ability to properly monitor Town financial operations and its overall financial condition is hindered. We also found the Town improperly budgeted and allocated its sales tax revenue. The Town and the Village receive separate sales tax distributions directly from the County. However, from at least 2009 through 2014, the Board did not allocate sales tax revenue to its part-town funds to eliminate property tax levies in those funds before allocating any remaining sales tax revenue to its town-wide funds. As a result, approximately $610,000 in taxpayer inequities occurred.

Department payroll payments were not adequately supported and leave time was not properly accrued or used. We found that, of the $276,000 paid to police officers during our audit period, $6,084 of overtime paid to the Chief and the full-time patrolman was not adequately supported by appropriate time sheets. We compared time sheets to other required, supporting time records, such as the police blotter and County dispatch records, and found discrepancies between all of these sources. We further found that the Board and Mayor did not monitor or review the Chief's compensatory time. Instead, the Board allowed the Chief to record unsupported compensatory time, as accrued and used for himself. We also found the full-time patrolman accrued sick leave in excess of the amount authorized. As a result of inadequate monitoring of the accrual and usage of leave time, the two full-time officers were improperly credited with leave time valued at more than $12,000. Village officials did not adequately monitor or develop a plan to address the causes for the difference in water produced by the Village's water system to the amount billed to customers. The Village produced more than 346 million gallons of water of which 92 million gallons of water was billed to customers, resulting in unaccounted-for water of 254 million gallons (73 percent). For perspective, this amount of water loss would cover more than one square mile with one foot of water. The Village could have saved approximately $66,000, during our audit period, if it did not need to produce the 254 million gallons.

The Supervisor and the Board did not ensure that all disbursements were for Town purposes and that all water rents were properly received and deposited because they did not establish adequate internal controls for the Town's cash disbursement process and for the collection of water rents. In one instance, the Supervisor and Board did not establish adequate controls, such as requesting and reviewing canceled check images, to avoid the additional fees that the Town's bank would charge for the canceled check images. The Board was not aware of other controls that could help ensure the safety of Town funds, such as properly segregating duties and reviewing the list of water rents to be re-levied. Furthermore, the Board did not ensure that duties were properly segregated for bookkeeping or for water rent collections, or provide adequate oversight of those duties. In addition, the new Supervisor adequately addressed deficiencies in the financial records of his office shortly after his term began in January 2014. The new Supervisor reviewed several of our prior audits and found that our recommendations were not being implemented. He has made progress implementing our prior repeated recommendations related to the financial records.

The Board did not provide adequate oversight of the Library's financial operations. The Board gave the Director check signing authority up to $999 per check. The Board adopted a credit card policy authorizing the Director to have custody, control and use of the Library credit card, but did not effectively monitor the usage of the credit card and its compliance with the credit card and procurement policies.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. The City has made progress in improving its financial condition. The City's comprehensive multiyear capital plan has not been updated and used for preparing the proposed budget. The general fund budget does not include an interest payment of $56,708 due on a bond anticipation note. The City's proposed budget complies with the property tax levy limit set by statute.

The Board has not provided effective oversight of the water district's financial operations, which has contributed to the water district's accounting records being incomplete and inaccurate. As a result, the Board was not aware of the water district's actual operating results and overall financial condition. In addition, the Board did not adopt realistic budgets and did not properly monitor the water district's financial operations throughout the year. Consequently, the water district realized significant operating deficits of $24,785 for 2012, $43,473 for 2013 and $61,600 (projected) for 2014. In June 2014, the town-wide general fund made a $30,410 interfund advance to the water district so that it could pay its operating expenses. We project that the water district will not be able to repay this interfund advance by the close of the fiscal year as required. We also identified significant internal control weaknesses over the Collector's financial activities. For example, the Collector did not maintain adequate, accurate and complete records and did not assess penalties to all tax payments that were received after the due date. In addition, the Collector did not physically secure tax collections prior to deposit and did not deposit collections in a timely manner and intact. Furthermore, the Collector did not refund overpayments in a timely manner and did not remit interest and penalties to the Supervisor in a timely manner or in the appropriate amounts. We also found that the Board did not audit the Collector's records as required. Consequently, the Town did not realize all potential revenues for penalties. In addition, as of July 31, 2014, the Collector had a cash shortage of at least $1,053, which resulted in the Collector not being able to disburse a $350 refund check for an overpayment or remit $1,010 in interest and penalties that were owed to the Supervisor.

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget are reasonable. The District's tentative budget for 2015-16 complies with the property tax levy limit.

The Board has not established an effective claims audit process. We examined 99 general fund and highway fund claims totaling $423,485 to determine whether they were properly authorized and approved, contained adequate supporting documentation, were in accordance with Town policies and were for proper Town purposes. The Board approved 51 claims totaling $103,341 that had deficiencies. We question how the Board approved these claims for payment without the necessary documentation. We also found a Board member has a prohibited interest in Town contracts. The Town made purchases from the Board member's business from January through December 2013 totaling $2,393, and from January through June 2014 totaling $1,057. When Town officers, in their private capacities, conduct business with the Town for which they serve, the public may question the appropriateness of the transactions.

The Town does not have complete, accurate and up-to-date accounting records because the Supervisor did not provide adequate oversight of the bookkeeper during our audit period or adequately segregate the duties of the bookkeeper and payroll clerk. Lack of oversight and errors in recording transactions caused the financial records to be misstated. As a result, the Supervisor could not provide the Board with sufficient interim financial reports and did not file the required annual financial report with OSC for 2012 and 2013 in a timely manner. Without complete, accurate and timely financial information, the Board could not properly monitor and manage Town operations.

The Solid Waste Manager has instituted various programs to divert waste from the landfill and monitors program effectiveness by tracking results at least quarterly. For fiscal years 2011 through 2013, the recycling program has saved the County more than $1 million

District officials have significantly improved the District's financial condition due to staff reductions and consolidation and restructuring of the location of students. However, we found that the Board and District officials did not adopt reasonable budgets that were based on realistic estimates of revenues and expenditures. Also, the Board has not adopted an adequate reserve policy and is not budgeting to fund reserves, but funds reserves at the end of the fiscal year. As a result, three of the District's six reserve funds are overfunded. Additionally, due to the District's budgeting practices, the balance in the debt service fund has increased significantly over the last two years. Furthermore, the District's current multiyear financial plan is inadequate and not sustainable.

The County Departments of Aging, Public Health, Mental Health and Social Services provide assistance to individuals and families with social service and financial needs through contracts with third-party agencies. Payments to these agencies total approximately $8.7 million per year. However, the Board does not provide proper administration and oversight. Although the Board has adopted a procurement policy, the County has awarded nine third-party contracts totaling $1.9 million without soliciting competition or documenting a justifiable reason for not soliciting competition and has paid three vendors $770,000 for various services without any written contracts with the vendors. In addition, there is no Board of Ethics and no one else helping to ensure that individuals are free from potential conflicts of interest in fulfilling their public responsibilities. Finally, although Department heads have various procedures to monitor contract performance and payments, the Board does not ensure that contracts are adequately monitored.

The Town's internal controls over payroll need to be improved. Payroll duties were not properly segregated. Department heads are not required to sign time cards showing their approval, and pre-approval for overtime was not required. We also found the Town's internal controls over vehicle fuel need to be improved. The Town does not take a physical inventory of its fuel and does not reconcile fuel purchases and usage. As a result, during a three-month period, 228.6 gallons, representing 7 percent, or $750, of the Town's diesel fuel cannot be accounted for.

The Board has contracted with the Foundation to provide services to the school, including legal assistance, advocacy, curriculum design and test administration for fees totaling $115,779 from 2010-11 through 2013-14. However, the compact contract with the Foundation is not sufficiently detailed to determine how the delivery of services will be measured and the fee structure does not appear to be reasonable. The fees to the Foundation are increasing because they are calculated as increasing percentages of per pupil revenues. There is no relationship between the fees to be paid to the Foundation and the services to be provided by the Foundation to the School's attendance and tuition revenue. Although the Board President recused himself from voting on the compact because he was the Executive Director of the Foundation, he did not disclose this information on the financial disclosure forms that he filed during our audit period, as required.