The Board did not effectively manage the Village's financial condition. The Board did not develop sound revenue budget estimates; it also failed to increase water and sewer rates, which drive the revenues in these funds. As a result, water and sewer revenues were overestimated by an average of 25 percent and 21 percent, respectively, which caused fund balance to decrease significantly in both funds from fiscal years 2009-10 through 2011-12. Unplanned operating deficits caused both the water and sewer funds to have a deficit fund balance. Over a four-year period, the deficit fund balance in the water fund grew by a total of $61,274, or 51 percent, while the sewer fund balance declined by a total of $42,974, or 132 percent. Although both funds had an operating surplus in the 2012-13 fiscal year, the funds still ended the year with deficit fund balances of $181,522 in the water fund and $10,424 in the sewer fund. The Village's general fund loaned moneys to these funds to offset the funds' deficit balances. Furthermore, the poor financial condition of the water and sewer funds has negatively impacted the cash flow of the Village's general fund.

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 proposed budget complies with the property tax levy limit.

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget are reasonable. The Village's proposed budget includes a tax levy which exceeds the allowable property tax levy limit. Therefore, to comply with the Law, the Board must adopt a local law overriding the tax levy limit before they adopt the proposed budget.

The unexpended surplus funds in the Village's general fund increased nearly $200,000 (45 percent) over the past five years to almost $640,000 as of May 31, 2013. As a result, the general fund's unexpended surplus funds in 2012-13 reached 182 percent of next year's appropriations. Unexpended surplus funds increased from 2008-09 through 2012-13 despite the Board adopting budgets that indicated that the Board planned to use some of the fund balance to partially fund operations. Village budgets included planned operating deficits in each of these years. However, from 2008-09 through 2012-13 Village operations generated a combined operating surplus totaling more than $187,000, eliminating any need for using appropriated fund balance except in 2011-12.

We found that the Clerk did not number claims or prepare abstracts of claims to be approved by the Board for payment by the Supervisor. Only the total amount of claims approved by the Board for payment was included in the Board minutes. We found that the amounts in the minutes did not agree with the total amounts of the approved claims for two of the four months we reviewed. For example, the February 2012 Board minutes indicated that the amount of claims approved for payment was $9,630 more than the claims filed with the Clerk. Conversely, the February 2013 Board minutes indicated that the amount of claims approved for payment was $1,128 less than the claims filed with the Clerk. The Clerk stated that she may have calculated the totals incorrectly before entering the amounts in the minutes.

The Board needs to improve its oversight and management of the District's budget. Over the last four fiscal years, the District's conservative budgeting practices resulted in operating surpluses that totaled approximately $164,000. To reduce fund balance, the Board appropriated unexpended surplus funds each year, for a four-year total of nearly $1.3 million, to help finance the ensuing year's operations. However, because of the District's surpluses, approximately $1 million of the fund balance appropriations over the four years went unused. As a result, the District accumulated unexpended surplus funds equivalent to 11 percent of the ensuing years' budgets, or nearly three times the amount allowed by law. Further, we found that the amount retained in the District's retirement contribution reserve is excessive and the District made retirement payments out of the general fund rather than the reserve fund. The Board also improperly appointed its President, in place of the Treasurer, as the sole signatory on District checks under $5,000, with its Vice President as co-signor for all District checks over $5,000. This Board action allowed one of its members to, in effect, also act as Treasurer for the purpose of disbursing District funds, which is prohibited by Education Law. Finally, the Board has not developed and adopted policies, including a disaster recovery plan and a breach notification policy, to ensure the District's electronic data is adequately safeguarded.

We found that the Board and District officials did not adopt and implement appropriate policies and procedures for the extra-classroom activity fund. As a result, the Board did not receive monthly extra-classroom activity fund records during the audit period. In October 2013, subsequent to the start of our fieldwork, the central treasurer started providing the Board with extra-classroom activity fund records. In addition, the student treasurers lacked sufficient documentation/accounting records for collections totaling $23,676, such as profit and loss statements, up-to-date activity ledgers or inventory control forms. The central treasurer did not provide the student treasurers with duplicate receipts for remittances from the various clubs totaling $23,676. Further, of these funds, there was insufficient documentation supporting $22,491 collected by the student treasurers to determine if the cash and checks collected were remitted timely to the central treasurer.

The Library retained excessive fund balance in each of the fiscal years 2006-07 through 2011-12 by as much as $2,435,455, which was 71 percent of the ensuing year's appropriations. For the fiscal years ended June 30, 2008 through June 30, 2012, Library officials increased unexpended surplus fund balance from $323,014 to $1,123,014, yet did not expend any of these funds during that period. Library officials have not communicated these surplus funds to taxpayers. Library officials have also maintained a capital projects fund despite having no current capital projects in place and no planned capital projects in the near future. In addition, using moneys from this fund, they purchased items that appear to be day-to-day expenditures that should have been paid from the general fund. Finally, Board members did not receive or request adequate financial information from the Director; as a result, the Board is not adequately informed of the Library's fiscal affairs.

The Board and College officials did not provide adequate oversight of the College's financial operations to ensure that College assets were adequately safeguarded. The Bursar's Office did not grant tuition waivers in accordance with the provisions of the College's collective bargaining agreements. Of the 97 waivers granted during the 2012-13 fiscal year, the Bursar's Office granted 43 waivers (approximately 45 percent) totaling $54,364 to individuals that were not eligible, resulting in lost revenue to the College in the same amount. We also found that some students were overbilled and/or underbilled for services received; adjustments were made to student accounts without approval; student refund checks were printed and disbursed without approval; and the timing of methods used to enforce delinquent student accounts were not consistent from one semester to the next. In addition, College officials have not properly limited users' access within the student management system and the system allowed for the ability to delete receipts and then issue the same receipt number a second time for a different transaction. Finally, we found that College officials did not solicit quotes for 15 purchases totaling $99,584 and the College paid $376,415 to eight professional service providers without soliciting competition. In addition, neither the Board nor any College official performed a proper audit of claims, resulting in the College paying credit card charges totaling $11,798 without sufficient documentation of the purchases that were made and $223,873 in payments being made to three professional service providers without written contracts.

The Board and Town officials were aware of revenue shortfalls in the water district fund, but did not take appropriate action to align estimated revenues in the adopted budgets with actual rate schedules. This resulted in an accumulated operating deficit totaling more than $14,000 from fiscal years 2011 through 2013 and, ultimately, a $4,000 deficit fund balance estimated as of December 31, 2013. Furthermore, the water district fund owed the general fund a cumulative balance of $66,388 as of December 31, 2013. The Board continued its inaccurate budgeting practices with the 2014 budget, which makes it unlikely that the water district fund will be able to begin to repay the general fund or improve its financial condition. We also identified weaknesses in the Justice Court's internal controls over financial operations. There was no documentation indicating that monthly bank reconciliations or accountabilities had been performed, and neither Justice reconciled their bail accounts. Furthermore, computerized records for bail were not accurate for Justice Mackey as well as three former Justices. Also, the former Justices' open case files within the computer system had not been properly transferred to the current Justices. Finally, the Board did not perform an annual audit of the Justices' books and records.

District officials did not verify that all non-original equipment manufacturer (OEM) school bus options were consistent with State contract pricing for the 16 school buses they purchased in 2012-13 and 2013-14. District officials did not obtain the State contract list price books, apply the appropriate contract discounts or compare the resultant prices with the invoice prices. As a result, they overpaid by $12,080 for two non-OEM options (rust proofing and heaters) installed on 12 of the buses. In addition, the Board did not properly plan for the use of reserve funds. As of June 30, 2013, the District had seven reserve funds with balances totaling $5 million. We analyzed these reserves for reasonableness and adherence to statutory requirements, and found the balances of five of the reserves appeared to be reasonable. However, the balances of two reserves (the unemployment insurance and tax reduction reserves) with balances totaling approximately $2.2 million appeared higher than necessary to fund costs that may be legally paid from these reserves.

The Board did not develop policies and procedures for budget preparation and monitoring and, as a result, repeatedly adopted budgets with inaccurate estimates for revenues, expenditures and appropriated fund balance. In the town-wide (TW) general fund, the overestimation of expenditures and underestimation of revenues created a positive budget variance of nearly $568,000 over five years. At the 2012 fiscal year end, the unrestricted fund balance amounted to 48 percent of the Town's general-fund expenditures for that year. Similarly, the 2012 year-end unrestricted fund balance in the town-outside-village (TOV) general fund amounted to 68 percent of the year's expenditures; and in the TOV highway fund, to 34 percent. These excess funds are considerably more than reasonably necessary for a financial cushion. Additionally, the Board did not appropriately allocate the Deputy Highway Superintendent's compensation, placing an inequitable burden on TW taxpayers. We also found that the Board did not establish sufficient controls over payroll records and leave time. Employees did not keep daily time records of regular and overtime hours worked or leave time used, and did not formally request leave time usage. Thus, payroll reports did not include leave time usage and inaccurately reported all paid hours as hours worked. In addition, the Highway Superintendent's sick leave accumulation surpassed the maximum by 64 days with leave time credited for 2013.

The Board did not adopt reasonable budgets and adequately manage the District's financial condition. The Board continually overestimated appropriations for the last three years causing the District to exceed the 4 percent statutory limit each year with the District's unassigned fund balance reaching $1,334,486 as of June 30, 2015, or 10.7 percent of the ensuing year's appropriations. Although the Board appropriated fund balance each year, the adopted budgets actually produced operating surpluses. As a result, none of the appropriated fund balance was used. When the unused appropriated fund balance was added back, the recalculated unassigned fund balance reached $2,034,486 or 16.4 percent of the ensuing year's appropriations. In addition, the District maintained a total of $565,000 in three reserve funds but had no plan for their use. The tax certiorari reserve is overfunded by as much as $145,000 (96 percent). Lastly, officials did not adopt a multiyear financial or capital plan.

The Board has not established policies and procedures to ensure adequate internal controls over the cash receipt process for taxes. Library personnel do not maintain a record of taxes received by fiscal year and they have no process in place to ensure the Library received the full amount of real property taxes levied for the Library each year. We determined that for the last four completed fiscal years the amounts transmitted to the Library by the District were $3,500 in 2010-11, $880 in 2011-12 and $46,500 (or 4.26 percent) in 2012-13 less than the voter approved tax levies. We discovered that the District has been reducing the amount of money paid to the Library when there are refunds in property assessments due to tax certiorari judgments. However, there is no authority for a school district to charge back any portion of a tax certiorari refund to a school district public library. The Board has also not established adequate internal controls for over-the-counter receipts. The Library does not have procedures in place to record all receipts at the time of collection and there are no procedures to ensure individual accountability.

The District's controls over extra-classroom activity funds were not operating effectively. The Board did not ensure that District officials implemented and enforced its policy governing the operations of the activity funds. Consequently, we found that 30 cash receipts totaling $19,322 had no supporting documentation and four student treasurers did not maintain ledgers during the 2012-13 fiscal year. The District's failure to maintain activity funds in accordance with the Board's policy increases the chance that extra-classroom activity moneys could be lost or misused. These deficiencies continued to exist even though our previous audit identified similar internal control weaknesses over the District's extra-classroom activity funds.

The Board did not implement adequate controls over the Department's financial activities, develop adequate policies and procedures, or adopt a code of ethics. The by-laws do not include any detailed financial procedures that would adequately segregate the duties of day-to-day financial operations. As a result, the Treasurer and Lottery Account Clerk perform all their financial duties with little oversight. We also found that as of November 2013 the Treasurer had not recorded the monthly lottery transactions since February 2013. Further, although all Department checks require two signatures, there is no evidence that the Board was consistently auditing the prior month's receipts, disbursements, account balances, bank statements and other records as required by the by-laws. There was also no evidence that the Board consistently reported the results of the audits in June and December to the Department members.

The Board adopted budgets that were not financed by sufficient recurring revenues. Instead, to keep the real property tax levy relatively level, the Board used fund balance to finance the Town's increasing expenditures. As a result, there were consistent operating deficits because expenditures exceeded revenues and fund balance was consumed, to the point of depleting fund balance. The 2013 budget included the use of fund balance totaling $70,734 in the town-wide highway fund and $84,766 in the part-town highway fund, while $50,123 and $57,490, respectively, was available. Overall, the available fund balance in all four of the major operating funds has declined between 40 and 99 percent from fiscal years 2009 through 2013. When preparing the 2014 budget, Town officials appropriated more than $104,000 in total fund balance in three of the Town's operating funds, but the part-town general fund and the town-wide highway fund did not have sufficient fund balance available to meet the appropriated amounts. As such, these two funds' deficits will increase. Further, the Board did not develop a multiyear financial plan. Had such a plan been in place, the Board would have been better able to monitor the use of fund balance before it was depleted.

District officials underestimated revenues and overestimated expenditures in the Board-adopted budgets for fiscal years 2008-09 through 2012-13, resulting in combined operating surpluses totaling more than $25 million. Although the Board appropriated unexpended surplus funds each year (exceeding a combined $13.2 million over the five-year period) to help finance the next years' operations, the District actually used less than $5.3 million to fund operations. The District accumulated unexpended surplus funds exceeded the statutory limit over the last three years, while at the same time, increased the real property tax levy by more than $6.6 million, a 9 percent increase.

The Supervisor did not ensure that the bookkeeper accurately maintained the Town's accounting records. As a result, the Town's accounting records were incomplete and inaccurate. In addition, the Supervisor did not adequately review the bookkeeper's monthly bank reconciliations. Consequently, the Supervisor was unaware of the discrepancies that we identified in the accounting records. The Supervisor also did not provide the Board with all the financial information it needs to monitor the Town's financial operations, and the Board did not conduct a proper audit of the Town's records. In addition, the Justices did not provide adequate oversight of their Court operations or the work performed by the Court clerks. The Justices also did not perform monthly accountabilities, and the Court clerks did not deposit all cash receipts collected intact. Further, we found that the Court clerks did not remit all cash receipts to appropriate parties in a timely manner, did not always issue receipts for moneys collected for bail and did not report all tickets issued and fines and fees collected to the Justice Court Fund. Also, Town officials did not perform an adequate audit of the Justices' records.

We found that the Board provides adequate oversight of District financial activities. The Board has adopted policies addressing ethics, procurement, travel and credit card use. The Treasurer provides the Board with monthly financial reports including cash balance and budget status reports. The Treasurer submitted the 2012 required annual financial report of the District's financial condition to the Office of the State Comptroller in a timely manner. The Board has contracted for an annual independent audit of District financial operations each year, as required. The Secretary completes claim forms and prepares voucher packages and submits them to the Board for audit and approval. The Board's process for auditing claims prior to payment includes reviewing all supporting documentation, including quotes obtained in accordance with the District's purchasing policy. Once audited and approved for payment by the Board, the claim packages are submitted to the Treasurer for payment. Except for minor issues that were discussed with District officials, the transactions were properly authorized and recorded in the accounting records and appeared to be for District purposes.