The Board did not develop and adopt realistic, structurally balanced general fund budgets because Village officials used fund balance as a recurring revenue source. This resulted in the repeated adoption of budgets using fund balance to finance operations. During fiscal years ended 2012 and 2013, the Village used over $120,800 of fund balance. This continued use diminished the Village's general fund balance to a precarious position by the end of the 2013-14 fiscal year. From fiscal years 2011-12 to 2013-14, the use of fund balance kept the real property tax levy artificially low while at the same time revenues remained at the same level and expenditures were increasing by 6 percent. The Village's 2014-15 budget includes an appropriation of $100,000 of fund balance, which is $150,000 less than the previous year. In order to fill the budget gap, Village officials overrode the property tax cap limit and increased taxes by over 8 percent.

The Board has generally adopted adequate policies and procedures, but there are still areas in need of improvement in its oversight of the Village's financial operations. The Board does not complete an adequate, documented annual audit of the Village Justice's and Clerk-Treasurer's records. Additionally, although the Board discusses plans for future equipment purchases regularly, a formal, written long-term financial plan has not been developed. We discussed other minor deficiencies with Village officials during our fieldwork.

We reviewed 151 health insurance buyout payments totaling $85,250 and 14 separation payments totaling $121,014 and found they were accurate, in compliance with the terms of employee contracts and approved by the Board. We commend the District for designing and implementing an appropriate system of controls over health insurance buyouts and separation payments.

The purpose of our audit was to determine if Court officials properly collected, reported and remitted moneys on behalf of the Court for the period January 1, 2012 through February 28, 2014.

The purpose of our audit was to determine if Court officials properly collected, reported and remitted moneys on behalf of the Court for the period January 1, 2012 through December 31, 2013.

The purpose of our audit was to determine if Court officials properly collected, reported and remitted moneys on behalf of the Court for the period January 1, 2012 through December 31, 2013.

The purpose of our audit was to determine if Court officials properly collected, reported and remitted moneys on behalf of the Court for the period January 1, 2012 through November 30, 2013.

We found that the Town's use of wind power revenues was reasonable. However, the Board did not adequately oversee the Supervisor or ensure that wind power revenues were properly reviewed for accuracy. Additionally, the Board did not annually audit the Supervisor's records as required. Consequently, Town officials were unaware the Town was not receiving the correct amount of host community licensing fees. As a result, from January 2009 through March 2014 the Town was underpaid wind power revenue totaling approximately $356,000. Further, the Board did not have a comprehensive multiyear financial and capital plan in place to adequately address wind power revenue use and the Town's long-term operational and capital needs. Finally, the Board did not properly establish its reserve funds. As a result, Town officials cannot ensure that the current and future use of wind power revenue will be in the best interest of Town residents.

We found that the Board did not monitor the Village's finances. The Board has not ensured that adequate policies and procedures required by law and sound business practice have been adopted, regularly reviewed and updated, monitored for compliance and distributed to officials/employees. It did not ensure that the Clerk-Treasurer maintained accurate accounting records. It also did not ensure that duties in the Clerk-Treasurer's office were properly segregated or provide mitigating controls, which created an environment that allowed for the possible misappropriation of Village funds. The lack of monitoring also led to the Village accumulating fund balance in excess of its current needs. We calculated an estimated fund balance level for the general, water and sewer funds at the 2012-13 year end, and estimate unexpended surplus funds to be excessive at $474,479 (82 percent) for the general fund and $131,095 (91 percent) for the sewer fund. The water fund, at $59,360 (23 percent), is more reasonable, but still high. Furthermore, there was no oversight of water/sewer account adjustments, which were made by the former Clerk-Treasurer without the Board's approval, and resulted in approximately $300,000 in reductions and $269,000 in added charges to customer accounts during our audit period. The Board also did not provide adequate oversight of payroll taxes, where Federal monthly and quarterly payroll-tax reports were filed late or incorrectly on numerous occasions and the Village incurred approximately $4,000 in penalties and interest during the audit period alone. Finally, the Board has not established policies and procedures related to acceptable use, computer security, breach notification or online banking, and the Board has not adopted a disaster recovery plan to address potential disasters.

At the end of 2013, unassigned fund balance totaled almost $178,000 or more than 3 times the 2014 budget appropriations. This occurred primarily because in 2008 and 2009 the District received unexpected insurance proceeds totaling about $157,000. Further, the Board currently has no plans to use a portion of the existing unassigned fund balance to reduce future real property tax levies. The District reported a capital reserve fund with a balance of $165,728 as of December 31, 2013. The Chairman told us that District officials created this reserve in the late 1990's to fund future costs of new vehicles. However, the Board could not provide us with a resolution, or any other documentation to show when or if this reserve fund was properly established or what type of reserve was established. The Chairman also informed us that the Board funded this reserve with annual budget appropriations of $10,000 until 2009. In 2010, District officials contracted with the City and another fire district to provide fire protection services to District residents instead of the fire department located within the District. Since then District officials continue to contract for fire protection services. As a result, the Board stopped annually budgeting for the capital reserve fund. District officials have not established any plans for using the money accounted for as a reserve fund. Because of the District's contractual arrangements with the City and the other fire district and the minimal amount of fire-fighting equipment owned, there is no apparent need for a capital reserve fund.

The Board needs to improve its oversight, including establishing appropriate internal controls over District activities. The Board inappropriately paid $990 to the Board Chair for service rendered, did not adopt written policies and procedures for cash receipts and disbursements, and did not adopt a travel policy. The Board also did not properly monitor the life insurance benefits provided to members, resulting in the improper coverage of paid firefighters under the volunteer firefighters' policy; did not have District financial records audited for 2011 and 2012 as required by law; and improperly retained an independent contractor to perform the duties of the Treasurer without a surety bond or written contract.

County officials need to improve internal controls over employee time and attendance practices and payroll processing. We found that the County overpaid $18,724 to employees for time not worked, or for leave time taken and not charged to leave accruals. We also identified an additional $24,824 in leave taken and not charged to leave accruals that County officials corrected as a result of our audit. This occurred because none of the departments examined had an effective system for reporting and recording time and attendance. Some County employees are not required to document their hours worked, and others report and approve their own attendance and leave records without independent verification and oversight. Therefore, County officials do not have adequate assurance that employees have worked the hours for which they have been paid. In addition, department heads did not require employees to submit formal time off request forms when taking time off. Consequently, some employees used accrued leave time that was not properly documented, available or deducted from leave accrual balances.

Cash receipts were not properly accounted for in the Department because City officials did not establish adequate internal controls that properly segregated the former senior account clerk's duties, and they did not provide adequate oversight of her duties. As a result of the Department's weak control environment, more than $5,000 in cash receipts was misappropriated over a three-month period. Specifically, we identified weaknesses in collecting, recording and depositing gross utility receipts and the fees for code enforcement, parking permits, water and sewer services, parking ticket fines, tax searches and garbage bags. City officials did not implement adequate policies and procedures over the collection of all cash receipts, provide adequate reconciliations of receivables to collections, implement adequate inventory controls and adequately segregate the functions of collecting, recording and depositing cash receipts. In addition, there were significant information technology weaknesses due to the use of shared usernames and passwords at the window terminals as well as the ability to overwrite transactions within the financial accounting program.

The Superintendent made inappropriate personal purchases totaling $68,501 without detection by the controls in place at the Town. He was able to accomplish this by attaching the invoices for these personal purchases to Department claim vouchers that often listed Department equipment as the recipient of the parts. However, these personal purchases included parts and oil for repairs to his personal farm equipment. This was further covered up by the Superintendent because he failed to maintain complete and up-to-date maintenance records for Department equipment and inventory records for consumables such as gasoline, oil and supplies. Additionally, the Town has no assurance that consumable inventory purchases totaling $25,044 were used for Town purposes. These acts occurred because the Board did not establish an adequate system of internal controls over Department purchases, including adopting a procurement policy or providing an adequate review of Department claims prior to approving them for payment.

County officials failed to properly manage the Golf Course Contract (Contract). County officials indicated that they were unfamiliar with certain Contract provisions and chose not to enforce numerous other provisions, without properly amending the Contract. For example, County officials did not require daily deposits of golf-fee revenues into County bank accounts and did not require and review timely interim and annual reports from the Operator, as specified in the Contract. In addition, the County did not ensure that the Operator made all contractually-required capital and maintenance expenditures annually or met all requirements related to staffing levels and the qualifications and training of the Operator's employees. As a result, the Operator did not perform or pay for a number of required contractual duties, as well as expenditures that the Operator implicitly expressed to County officials that it would make, and retained funds totaling over $246,000 that should have been spent on the golf courses. Further, the County failed to provide adequate oversight of the Operator's performance and operations to ensure that the County was receiving all revenues to which it was entitled based on the Operator's sales revenues. Given that cash receipts are highly susceptible to loss or theft, provisions such as daily deposits were especially important to safeguard the County's interests.

It appears the former Treasurer was able to misappropriate approximately $22,000 from January 2009 through December 2013 without detection by Department officials. In addition, during this period, the former Treasurer was able to process and pay 188 claims totaling approximately $33,000 without maintaining adequate supporting documentation. While Department officials believe the majority of these payments were for Department expenditures, because proper supporting documentation was not maintained, they could not ensure the validity of these payments. These discrepancies occurred because the Department's governing body did not adequately safeguard Department funds. Specifically, it did not develop and implement adequate internal controls over the Department's cash receipts and disbursements functions and did not annually audit the Treasurer's records from 2009 through 2013. The former Treasurer did not maintain reports of Department financial activities, report to the governing body, or prepare monthly bank reconciliations.

The Board has not adopted a disaster recovery plan or an acceptable use policy. While computer policies do not guarantee the safety of an entity's computer system or the electronic information entrusted to it by taxpayers, customers, employees and others, the lack of policies significantly increases the risk that data, hardware and software systems may be lost or damaged by inappropriate access and use.

Town officials did not adopt realistic budgets based on historical or known trends for the Town's three sewer districts. In addition, the Board did not effectively monitor the budgets throughout the year and did not require the Town Comptroller to present accurate and reliable financial information on a regular basis. As a result, the sewer fund's financial condition has deteriorated in recent years. As of December 31, 2012, the sewer fund reported an accumulated deficit of $160,150 and its accumulated deficit for 2013 was approximately $249,000. As a result, the sewer fund has had to rely on the general fund to subsidize its operations, which causes a taxpayer inequity. As of December 31, 2013, the sewer fund owed the general fund $406,579.

The Board and District administrative staff initiated some significant steps to reduce expenditures and maintain financial stability beginning in the 2010-11 fiscal year. However, the Board-adopted budgets for the 2010-11, 2011-12 and 2012-13 fiscal years were not structurally balanced to include recurring revenues to finance recurring expenditures. Additionally, officials used more than $1 million of fund balance to finance District operations over this three-year period. The District also lost other revenue sources from 2010-11 through 2012-13. Even though the District currently has fund balance, if these trends continue it could result in diminished fund balance levels in the future.

We found that the District was not transparent in its use of Project funds and potentially could have spent less on the Project. The District has set aside over $6.6 million for general construction and site work contracts which was not part of the Project's original scope. Additionally, the Board President did not approve all change orders and allowance disbursement forms, as required by the New York State Education Department (NYSED). In addition, none of the allowance disbursement forms were approved by NYSED. Finally, we found a Project purchase for which competitive bids were not obtained.