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.

Both the Superintendent and Assistant Superintendent have a private interest in a company that conducted business with the District. Therefore, we question whether they adequately complied with the District's ethics policy. The responses to financial disclosure forms and subsequent discussions with the Superintendent and the Assistant Superintendent showed that they had an ownership interest in a limited liability company (LLC) that had previously contracted with the District to provide software and technical support for online report cards. In at least one year after the LLC discontinued providing the service, the Superintendent recommended to the Board, and the Board approved, a contract with the LLC's principal owner to provide services similar to what the LLC had previously provided. Specifically, the District paid the LLC $45,342 between February 3, 2006 and April 18, 2008, and paid the principal owner (personally) $28,800 between March 2010 and June 2013 for online report card software and support services. Also, District records showed that the Superintendent signed an agreement for $7,800 for the LLC's principal owner to provide online software support and report card services for the 2013-14 school year. Similarly, the Assistant Superintendent signed an agreement for $5,800 for the LLC's principal owner to provide a similar type of service during the 2011-12 school year. We found no evidence that the District requested proposals or solicited quotes procuring this service.

The Justices failed to establish appropriate internal controls over the Court's financial process. Court moneys were not properly recorded, deposited or reported to the JCF during the audit period. Court's liabilities of $66,297 exceeded the Justices' total available cash of $2,661 as of February 6, 2014 resulting in a cash shortage of $63,636. Because the Clerk controlled all phases of the Court's cash collection processes, she was able to manipulate the records and apparently misappropriate funds. By letting the Clerk have complete control over the collection and reporting process, the Justices failed to provide proper oversight of their financial activity. In addition, neither the Justices nor the Clerk performed monthly accountabilities. We also found no indication that the Board conducted, or retained anyone to conduct, the required annual audit of the Justices' records since July 2011.

The Board failed to establish adequate internal controls or provide oversight of the Department’s financial operations, which resulted in the misuse of funds and unaccounted-for raffle proceeds.

The Board has not provided adequate oversight of Library operations. It has not established appropriate controls over the authorization and payment of overtime. We found that part-time employees worked 830 hours of overtime without necessary management approval. Part-time employees received over $21,000 of overtime payments for overtime work that was not properly approved by management. Furthermore, we found that the Board did not provide prior approval for eight of 12 programs held at the Library in 2013. In addition, the Board did not ensure that all program performers/presenters signed contracts with the Library and submitted the required applications for use of the Library facility as required by Board policy. We also found that the Board spent $8,500 for four Board members and a Board member's relative to travel to an event in Birmingham, Alabama that may not have been for official Library business. The Library also does not have an accurate and complete inventory record that is periodically reconciled. As a result, the Board was unaware that laptops valued at $1,699 each and assigned to two Board members had been stolen; one within days of the Board member receiving it, and the other from the Board member's relative in North Carolina. We also found that the Board did not implement policies or procedures to help properly classify individuals as independent contractors or employees. Finally, the Board did not have adequate controls over the disbursement process and did not audit and approve claims before payment.

The Board needs to improve controls over cash management to adequately safeguard cash collected in three Town departments. The Town does not have effective policies and procedures to ensure that departmental cash is properly protected by the Receiver, the Clerk and Waste Management departments. Additionally, job duties in these departments were not adequately segregated and proper bank reconciliations were not performed. The Board also did not ensure that Town officials followed statutory bidding requirements and the Town's procurement policy. We identified $115,529 in purchases that were not properly bid as required by law and approximately $24,000 in purchases that were made without obtaining quotes as required by Town policy. Further, officials did not develop and follow formal procedures for obtaining professional services and did not have written contracts in place with all professional service providers. In addition, Town officials did not ensure that employees were paid correctly or that leave accrual records were accurate, because controls over payroll and leave time were not properly designed or operating effectively. While the Board adopted policies and procedures over timekeeping, it did not ensure that these policies and procedures were followed. As a result, Town officials spent more than $157,000 on a timekeeping system that was not used effectively. Finally, the Board has not established adequate policies and procedures for maintaining leave accrual records or monitoring leave accruals earned and used.

We found that the Board generally ensured that Company funds were properly deposited and disbursed. The Board-adopted bylaws established adequate controls over Company funds. The Board also hired an independent auditor and appointed a committee; each individually performed an annual audit of the Treasurer's records. However, both audits did not have procedures in place to obtain or review cancelled check images. Therefore, these audits could not effectively ensure disbursements were paid to Company vendors. Additionally, adequate documentation of the President's approval for disbursements was not always kept.

Company officials did not have sufficient controls over cash collected for fund-raising events to ensure that all moneys received were deposited. The Company held fund-raisers through cider sales, ice cream socials and chicken barbeques. The Company officials felt that their current procedures were sufficient to provide adequate oversight for fund-raising events. However, although officials report the net profit to the membership, there is no documentation to verify the amounts that should have been collected.

The Board complied with applicable laws, rules and regulations including the adoption of a code of ethics. The Board adopted bylaws, and established procedures to ensure receipts were deposited and accurately recorded and disbursements were for legitimate Company purposes. The Treasurer maintains complete, accurate and timely records and presents monthly reports of Company financial activities to the Board. Except for minor weaknesses which we discussed with Company officers, we determined that controls are adequate to ensure moneys are safeguarded and financial activity is properly recorded and reported.

The County's internal controls over the timekeeping system were not adequate to ensure employees received only the pay and leave-time benefits to which they were entitled. Although the County Legislature has adopted policies and procedures related to the timekeeping system, we identified weaknesses in those policies. Furthermore, the Legislature has not established procedures to ensure that the Supervisors and department heads comply with the adopted policies. Enforcement of the policies and procedures is handled at the departmental level and has resulted in inconsistencies among the departments in the approval of overtime, modifying time records and the process for charging leave accruals.

We found that the Board has established adequate internal controls over the departmental processing of cash collections. We commend Town officials for designing and implementing an appropriate system of controls over departmental cash receipts.

The former Chief left Town service in September 2011, and the highest ranking sergeant took over the Chief's responsibilities at that time. However, the Town did not hire a replacement until April 2013. During this time, Department employees did not comply with established procedures regarding payroll, creating an environment that allowed errors and irregularities to occur. Specifically, all eighteen officers did not sign the member attendance record, or sign-in sheets, 746 times, and overtime of approximately $19,300 was not properly documented. In addition, an officer working for another entity had time overlaps of about 47 hours totaling $2,153. We also found six instances where a full-time officer scheduled to work did not appear to have worked the hours claimed on his timesheet. This officer received payment, at his higher rate, while a part-time officer who was not on the schedule worked in his place, but did not claim or receive payment for time worked. Additionally, four officers, including a sergeant, were given a total of 11 chart days (paid days off due to scheduling) totaling approximately $3,300 to which they were not entitled. Furthermore, these four officers claimed and received a total of $240 in Officer-In-Charge pay to which they were not entitled. Finally, leave time was not properly managed. Leave time records maintained at the Department did not match those in the Town payroll register.

The District's Point System is not consistent with GML. District officials did not implement standards and procedures to ensure that the records maintained for activities performed under the Point System were accurate and complete. District officials also did not ensure that District employees were not granted LOSAP points for performing activities as volunteer firefighters during their regularly scheduled work hours. Our review of LOSAP records for 23 of the District's 73 LOSAP participants showed that none of these 23 volunteer firefighters received accurate LOSAP points. In addition, three volunteer firefighters, who are also District employees, were incorrectly granted LOSAP points for performing activities during their regularly scheduled work hours.

The purpose of our review was to determine whether County officials have established appropriate controls to safeguard and account for court and trust funds for the period January 1, 2013 through January 1, 2014.