We found that the records maintained by the Surrogate's Court and County Clerk were generally up-to-date and complete, and we did not find any material discrepancies. Pursuant to Section 600(1)(a) of the New York State Abandoned Property Law (Abandoned Property Law), moneys which have remained in the hands of the county treasurer for a period of three years, together with all accumulated interest thereon, less the treasurer's statutory fees, are deemed abandoned property. The treasurer should, after public notice, pay all such abandoned moneys to OSC by the 10th of April of the next succeeding year, according to Abandoned Property Law, Section 602(1). We identified 18 actions totaling $66,637 that have not been turned over to OSC as abandoned property, even though the funds have been in the custody of the Treasurer for more than three years.

The Board does not ensure the joint water project (JWP) is operated in accordance with the intermunicipal cooperation agreements. The Board does not require the City to make its quarterly estimated payments for operating costs and the annual reconciliation of expenditures for 2013 was not completed until July 22, 2014. In addition, JWP funds were not deposited into a separate bank account and there is no rationale to support the 4 percent administrative fee that the City charges the Town for maintaining JWP financial activities. Finally, there is no provision for contingency funds in the JWP budget. The JWP does not have sufficient funds to pay its expenditures in a timely manner, causing, for example, 70 percent of the 271 invoices we reviewed to be paid late, with late fees totaling $13,121. Further, neither the City nor the Town know the actual JWP liabilities and there is a risk that the JWP might not have sufficient resources in the event of an emergency.

We found that the records maintained by the Surrogate's Court were generally up-to-date and complete, and we did not find any material discrepancies. However, we found that the County Clerk (Clerk) is not maintaining up-to-date court and trust fund records. New York State County Law requires the Clerk to maintain a record of all moneys and securities paid, transferred or deposited, or ordered to be paid, transferred or deposited to a court. Although the Clerk maintains this record, it is incomplete. One of the five court and trust deposits made to the Commissioner through the Clerk's office in 2013 was not listed on the Clerk's record. In addition, pursuant to New York State Finance Law Section 184, the Commissioner is required to submit a report on an annual basis to OSC accounting for all money, securities and other properties deposited to court and ordered into her custody. We found that the Commissioner did not report the condition of all court and trust funds to OSC as required by law. Although the Commissioner's report on the condition of court and trust funds was correct in total, it did not include detailed descriptions of the projects closed during the 2013 fiscal year.

The Board did not design and implement an adequate system to monitor CCIDA approved projects. For example, CCIDA officials did not have a system in place to track the amounts directly billed and collected by taxing jurisdictions for PILOTs. As a result, we found that two projects overpaid PILOTs totaling $78,879 and six projects underpaid PILOTs totaling $63,510. Furthermore, CCIDA officials did not comply with the UTEP requirements for monitoring the sales and use tax exemptions used by approved projects because the officials did not obtain copies of ST-340 forms or detailed records from all project owners to verify the amount of sales and use tax exemptions claimed. The CCIDA also did not have an effective process in place to monitor and evaluate agreed-upon job expectations, which may have helped avoid a shortfall of 100 jobs for eight of the 10 projects we reviewed. The CCIDA also did not have a process in place to monitor projects to ensure that properties were reconveyed in a timely manner. Six of eight project properties that we reviewed were not reconveyed in a timely manner. The failure to reconvey properties in a timely manner resulted in reduced annual total taxable assessed values for Clinton County, the Town of Plattsburgh and the Beekmantown Central School District. We found that a combined total of $1,695,538 in real property taxes would have been paid to Clinton County, the Town of Plattsburgh and the Beekmantown Central School District if the four TDC projects' properties had been returned to the tax rolls upon the expiration of their PILOT agreements. This also resulted in the Town of Plattsburgh annually receiving a reduced share of sales tax moneys distributed from Clinton County.

Overall, we found that the Authority's controls were appropriately designed and operating effectively to ensure tenant rents were properly billed, recorded and deposited. Except for minor deficiencies, which we have discussed with Authority officials to help them improve controls, we found no significant deficiencies in the records we examined.

We found that the records maintained by the Surrogate's Court were generally up-to-date and complete, and we did not find any material discrepancies. However, we found that the County Clerk (Clerk) is not maintaining appropriate court and trust fund records. Although the Clerk maintains scanned copies of all court orders filed in his office, the Clerk does not make an entry into the court and trust fund register of the money ordered to be paid into a court. We found that the Treasurer established adequate procedures, maintained appropriate records and properly reported the condition of court and trust funds to the State Comptroller as prescribed by statute. However, we identified two actions totaling $507 which improperly remained in the Treasurer's custody and should have been turned over to the State Comptroller as abandoned property. After we brought these actions to his attention, the Treasurer agreed to take immediate corrective action.

Since early 2000, the District's financial condition has been negatively impacted by commercial property owners' successful tax certiorari claims against the District and related local governments. For example, one major commercial taxpayer had its real property tax liability reduced from approximately $46 million to $1.6 million in 2014 and each of the succeeding six years, ending in 2020. In 2007, District officials issued $194 million in debt to pay tax certiorari claims. The repayment of this debt started in April 2008 and cost the District more than $12 million the first year and will cost approximately $11.5 million annually for each succeeding year through 2037. In addition, the District has received an average of 26 percent less in State Foundation aid since the 2009-10 fiscal year, which is a major source of its revenues. These increased costs and decreased revenues have deteriorated the District's financial condition. To keep the District's financial condition from declining further, District officials told us they closely monitored expenditures and restricted departmental budgets each year. In addition, they consolidated the use of school buildings, closed two schools and reduced staff to help maintain the District's financial stability. District officials told us that they were able to accomplish these reductions in operating costs while maintaining crucial services to 8,000 students. Instead of significantly increasing property taxes, the Board maximized the use of fund balance each year and reduced the need for reserves. However, the District's fund balance has been consistently reduced each year.

The Board does not have an effective system of internal controls over private source funds money. The Board does not report the receipt or disbursement of private funds in its reports to either SED or OSC. Because Library officials did not report moneys received from private sources, taxpayers, SED and OSC do not have an accurate picture of the Library's financial condition. The Board also gave the former Director a $5,000 gift from the private funds as a reward for her over 30 years of service. Board minutes did not indicate Board approval of this gift. We also identified an additional $1,500 in gifts or awards that the Board approved to be paid from private funds, which included a $150 longevity award to the former Director. In addition, the Board has established policies related to payroll and leave accruals for both part-time and full-time Library employees, including the Director. However, Library officials have not established procedures to effectively record and monitor employee leave accruals, including vacation, sick, personal and compensatory leave. Without a standard procedure for recording and tracking employee leave-time accruals and periodic reviews by the Director and the Board to verify that employees leave-time accruals are accurate and adhere to Board policies, the Library is at risk of paying employees leave accruals to which they are not entitled. For example, when the former Director retired in September 2013, she was inappropriately paid for 12 days of unused leave, or $3,180, because she was able to earn comp time in excess of limit set by the Board's policy.

Town officials need to improve internal controls over the Town's payroll function. Because there were no comprehensive written policies and procedures over processing payroll and leave time accruals, the Secretary performed virtually all payroll functions with limited oversight and insufficient compensating controls in place. Although our review of payroll processing did not reveal any material discrepancies, because the Town lacked adequate internal controls errors could occur and remain undetected. Additionally, the Secretary and the building maintenance worker earned and used 174.50 hours of vacation and sick leave, when there was no Board approval authorizing these benefits. Finally, employees' leave accrual records were not accurately maintained. As a result, three employees' leave accrual records contained errors totaling 149.50 hours, valued at $3,020.

District officials did not develop reasonable budgets. Revenue estimates were generally close to the actual revenues received. However, over the last three fiscal years, the District spent nearly $5 million less than planned and did not use any of the appropriated fund balance that it budgeted to finance operations (an average of $1.5 million over the last three years). From 2011-12 through 2013-14 the District's total fund balance increased by more than $885,000 (25 percent), while the real property tax levy increased by about $536,000 (10 percent). District officials reported year-end unrestricted funds at levels that essentially complied with the 4 percent statutory limit. However, by consistently overestimating expenditures and appropriating fund balance that was not used to fund operations, the District's actual unrestricted fund balance totaled almost three times the amount allowed by law. Consequently, the District's real property tax levies were greater than necessary to fund operations.

We found that the District's retiree health insurance reserve with $444,545 is not a legally permissible reserve. Currently, there is no statutory authority for a district to establish a reserve for post-employment benefits that are not based on employees' earned and unused leave time. The District established this reserve to fund the District's portion of retiree health insurance premiums based on the recommendation of its external auditors. The District's Business Manager stated that they were not aware that there was no authority for the establishment of such a reserve because the District's external auditors suggested it. Because there is no statutory authority for this type of reserve, the improperly restricted amounts must be included in the District's unrestricted fund balance. Had the funds been properly reported, the statutory limit would have been exceeded for all five years reviewed. As of June 30, 2014, the District had unrestricted fund balance totaling $506,554, and the reserve fund had a balance of $444,545. If the funds were properly reported, unrestricted fund balance would have totaled $951,099, which is 7 percent of the ensuing year's budgeted appropriations, exceeding the statutory limit of 4 percent by more than $435,099, about 80 percent more than allowed.

We reviewed the District's online banking practices and found that the Board and District officials did not establish adequate online banking internal controls to ensure sufficient protection of the District's assets. We identified areas that need to be improved to reduce the inherent risks of online banking. The District unnecessarily has online banking access for all of its bank accounts. In addition, District officials do not secure user names, passwords and secured tokens. They also do not consistently erase the browser history after online banking. Further, the District did not have agreements with its banks to clearly prescribe the manner in which electronic or wire transfer of funds would be accomplished. District officials also have not enabled necessary alerts and other security measures available from the District's banks.

City officials did not follow appropriate policies and procedures when procuring audit services because they did not solicit written proposals for audit services. The City signed a contract with a CPA firm in June 1996. The City renewed the contract every five years until the City ended its relationship with the CPA firm in 2013. We found no evidence to indicate that City officials ever solicited requests for proposals (RFPs) for audit services during this 17-year period. In addition, the City does not have an audit committee to oversee and evaluate the CPA firm's work. We reviewed the CPA firm's work papers supporting their audit of the City's financial statements for the fiscal year ending December 31, 2012 to determine whether the CPA firm's audit services met generally accepted government auditing standards (GAGAS). The CPA firm's work papers generally met most auditing standards. However, we believe that the audit work papers were deficient in certain key areas including audit documentation, testing and supervision. If the Council and City officials had solicited RFPs for audit services, then perhaps the Council may have selected a different CPA firm that likely would have identified that the City accounting records were in such poor condition and that the City was experiencing significant fiscal stress. The Council and City officials would have had the opportunity to take action earlier to address the fiscal problems facing the City.

Although the Officers developed some policies and procedures, the Officers are not sufficiently ensuring that the Treasurer is properly accounting for cash receipts and disbursements because the Treasurer performs most accounting duties with only limited oversight. For example, the Treasurer collects and deposits money, signs all checks, records receipts and disbursements, reconciles bank accounts and reports monthly and annually to the members. Although the Officers review the Treasurer's reports and bills for payment at monthly meetings and the Board performs an annual audit, the Officers do not review monthly bank reconciliations prepared by the Treasurer or bank statements and the Officers are not receiving canceled check images to ensure that only previously approved disbursements are made as presented. Further, the Officers have not included specific procedures in the bylaws regarding the support for disbursements and process to audit these payments. Moreover, the Company's bylaws do not contain specific cash receipt requirements. As a result, there are only limited procedures to verify cash receipt accountability. For example, two individuals and the Treasurer are responsible for counting fundraising cash receipts after the events but prior to depositing the moneys; however, no one initials the cash sheets used that list the amounts collected or compares the amounts received with the numbers of items sold.

The Clerk did not issue receipts for collections when necessary. The Clerk did not make deposits in a timely manner and in 2013 the Clerk only made four deposits because collections were held for extended periods of time. In addition, the Clerk did not perform monthly bank reconciliations and accountabilities, comparing the available cash to the known liabilities. The Clerk did not submit a monthly report of all moneys she received and disbursed to the Supervisor and did not make disbursements to the Supervisor and State agencies in a timely manner. Finally, the Board did not provide adequate oversight of the Clerk's financial activities and did not provide for an annual audit of the Clerk's records.

The Board ensured that cash disbursements, including payroll, were for proper Library purposes. The administrative assistant was assigned and performed many key financial duties such as reviewing cash drawer receipts and deposits; recording all transactions including payroll, cash receipts and disbursements; and printing disbursement checks. As a result, the Director and Board instituted specific mitigating controls to reduce the risk that payment processing errors and irregularities could occur and not be detected. However, the Director allowed the Library's payroll vendor access to a Library bank account to withdraw funds for payroll and related payments and fees for its services. The Director and Board recognized the associated risks and took steps to prevent any errors or irregularities and detect them in a timely manner. Our audit testing revealed that the mitigating controls Library officials put in place were operating effectively and we found no exceptions with the propriety and complete and accurate recording for the transactions we reviewed.

The Board did not provide proper oversight of the Clerk-Treasurer. The Board did not request adequate reports from the Clerk-Treasurer and was unable to make informed financial decisions. In addition, the Clerk-Treasurer had errors in her accounting records. Her records understated the total fund balance of the general, water and sewer funds by $114,572, $74,000 and $42,300, respectively. Therefore, Village officials are not aware of the Village's true financial position. Furthermore, although water and sewer receipts were collected, deposited and reported accurately, the Board did not ensure the Clerk-Treasurer properly accounted for penalties, that billings were at Board-approved rates and that adjustments were always supported or authorized. In addition, the Village billed $77,000 more in water and sewer capital assessment charges than were legally allowed because they did not establish the proper local law.

The Board did not effectively oversee the Village's financial operations. The Clerk-Treasurer did not perform monthly bank reconciliations or provide the Board with complete and accurate monthly financial reports. In addition, the Clerk-Treasurer has not filed an annual financial report with the Office of the State Comptroller since the 2008-09 fiscal year. Further, the Clerk-Treasurer paid all 44 claims totaling $50,075 during our audit period without prior Board audit and approval. Finally, the Board did not annually audit or cause an audit of the Clerk-Treasurer's records and reports.

The Board did not develop and implement adequate internal controls over the Company's cash disbursement and receipt functions and did not cause the Company's financial records to be annually audited as required by the bylaws. Additionally, the Board did not provide adequate oversight of Company financial activity. As a result, we found approximately $38,000 in unsupported disbursements that may not have been for appropriate Company purposes, including approximately $3,800 paid to the Club Treasurer and about $3,000 paid to the Fire Chief. Additionally, we identified approximately $18,700 in unidentified Club deposits and at least $3,700 in unremitted fund-raising proceeds and hall rentals deposited in the Club's bank account.

We found that expenditures were accurately recorded in the accounting records for our audit period. However, the accounting records and monthly reports contained inaccurate monthly cash balances. Additionally, revenues received in 2014 totaling more than $500,000 (29 percent of the 2014 budget) were not recorded in the accounting records or reported to the Board. These discrepancies occurred because no one compared the reconciled bank balances with the recorded cash balances until after the end of the year and the Budget Officer did not record and report all the revenues received in 2014 to the Board. As a result, the Board cannot effectively monitor the Town's financial operations and there is an increased risk that errors or irregularities could occur and remain undetected and uncorrected.