We found weaknesses in the College's internal controls over IT assets. College officials do not maintain a complete and comprehensive software inventory list that contains all software that the College currently owns and has installed on its computers. In addition, the College does not regularly monitor or review its computers to ensure that all software installed is approved and legally obtained. Further, the College could not provide supporting documentation for five software programs installed on College computers. We found that one of 36 computers reviewed contained gaming and instant messaging software.

At December 31, 2012, the general fund balance was 12 percent of the $409 million budgeted for 2013. Although the Legislature adopts realistic budgets, they appropriate general fund balance every year to subsidize the airport and bus transportation enterprise funds. As a result, $3.5 million in operating surplus in 2012 resulted in fund balance increasing by $2 million with $1.5 million used to subsidize the enterprise funds. While the County's budgeting practices have improved its financial condition, the continued subsidizing of the enterprise funds will impact these efforts. An additional $5.7 million of appropriated fund balance was budgeted in 2013 and proposed in the 2014 budget to subsidize both funds.

We found that the Board generally provides adequate oversight of District financial activities, but should make certain improvements. Although the Board audits and approves claims for payment at its monthly meetings, the Treasurer processes and pays certain claims prior to the Board's audit which are not statutorily authorized for payment in advance of audit. In addition, the Board did not use the prescribed budget format, and adopted budgets did not include the required comparisons to prior years, the detail for non-property tax revenue estimates, or estimated fund balance. Furthermore, the monthly reports provided by the Treasurer include only year-to-date information and do not provide detail for the current month's activities, which makes it more difficult for the Board to monitor operations on a monthly basis.

We found that the Clerk deposited all moneys collected and remitted these moneys to the Supervisor, County and other agencies appropriately. In addition, moneys collected were reported in an accurate and timely manner. However, the Clerk, as the Tax Collector, did not deposit or remit real property taxes received in a timely manner. We also found that the Board is not providing adequate oversight of the Clerk's operations and has not conducted the required annual audit of the books and records of the Clerk/Tax Collector. Because of these weaknesses, the risk is increased that Town moneys could be lost or misappropriated.

The Board did not comply with its own policy for firehouse hall rentals, and it did not review and/or approve, monitor or control the firehouse hall rental process. As a result, one Commissioner (Commissioner A) controlled all aspects of hall rentals, including taking and recording reservations for hall rentals, collecting rental fees and depositing moneys in the District's bank account. Because the Board did not properly oversee transactions related to the firehouse hall rental process, Commissioner A was able to rent the hall to various individuals and organizations and collect but not deposit any of the approximately $43,800 rental moneys generated by these events. The District's policies for credit card use, meals and refreshments, and cell phone usage were weak. Not only did the Board fail to provide oversight in these areas, individual Board members themselves abused these District resources. For example, of the $44,245 of credit card purchases that we identified as being questionable, $33,063 were made by one Board Commissioner (Commissioner A). Finally, the District's capital asset policy does not provide adequate guidance regarding appropriate inventory recordkeeping and vehicle and equipment usage and disposal. The District has more sport utility vehicles (SUVs) than appear to be necessary for appropriate District operations, seven of which were either not being used or were assigned to employees who did not need District-owned vehicles to fulfill their job responsibilities.

The Supervisor did not maintain complete and accurate accounting records and reports for all Town funds or ensure that bank reconciliations were properly performed. This resulted in accounting errors and the failure to file annual financial reports with OSC in a timely manner. Further, the Board did not annually audit, or have an independent public accountant audit, the Supervisor's records.

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget are reasonable. We also found that the District's proposed budget complies with the property tax levy limit.

A monthly Treasurer's report is submitted to the Board that includes monthly payments, as well as the year-to-date expenditures and a report which compares the budgeted expenditures by individual budget line item to the total amounts spent from each line item to date. However, the monthly reports to the Board are not accompanied by bank statements or bank reconciliations, which prevents the Board from knowing the amount of cash on hand and that the bank balance reconciles to the cash balance per the records maintained by the Treasurer. The Treasurer did not maintain complete records because she did not record deposits in the checkbook register or maintain a running cash balance. As a result, bank reconciliations could not be completed by the Treasurer and provided to the Board. The Board should also review the cash balance recorded in the checkbook register to make sure a running cash balance is maintained. The Treasurer has not filed an annual financial report with the Office of the State Comptroller since the fiscal year ending December 31, 2010, when it was filed with assistance from our office.

Starting in fiscal year 2010-11, the District's school lunch fund incurred a $14,000 deficit fund balance; this deficit has since increased to almost $287,000 at the end of the 2012-13 fiscal year. The general fund's unrestricted unappropriated funds also dropped 77 percent, from approximately $1.5 million at the beginning of the 2010-11 fiscal year to $353,000 at the end of the 2011-12 fiscal year. These declines occurred because the Board consistently overestimated revenues in the budget. During the last three completed fiscal years, the District's revenues fell short by an average of $740,000 in the general fund and $100,000 in the school lunch fund. We also found that the Board has not developed a current multiyear financial plan or capital plan to complement the budget development process.

The District sponsors and funds a defined benefit length of service award program (LOSAP), which is intended to facilitate recruitment and retention of active volunteer firefighters by providing them with a monthly pension-like benefit based upon their years of firefighting service to the District. Points must be granted for performing certain activities, in accordance with a system established by the LOSAP's sponsor (Point System). The activities for which points may be granted are specified in General Municipal Law (GML). The District's Point System was not consistent with GML. Additionally, District officials did not implement standards and procedures ensuring that records of activities performed under the Point System maintained were accurate and complete. Further, District officials did not obtain an annual independent audit of the LOSAP as required. Because of these deficiencies, the District may have paid for benefits that were not legitimately earned, participants might not have received the service credit to which they were entitled and District officials cannot be certain that the LOSAP's assets are sufficient to pay the benefits to which members are entitled.

The District had five general fund reserves during our audit period. The liability claims and property loss reserve funds were recently created District reserves, while the repair, retirement contribution and unemployment insurance reserves have existed for several years. The Board properly authorized only the retirement contribution reserve. District officials could not provide us with any documentation showing the Board's formal approval establishing the other four reserves. The Board also did not adopt any written policies governing the establishment and use of its reserve funds. The Board extensively funded its reserves and consistently over-appropriated fund balance which resulted in the general fund incurring unassigned fund balance deficits ranging from $985,262 to $140,430 over the past three fiscal years. The District inappropriately transferred funds from the liability claims reserve. Finally, the District may have overfunded the liability claims, property loss and unemployment insurance reserves.

We found that the Board did not develop or implement procedures to track Community Development Block Grant (CDBG) funding and document how grant funds were spent and that the intended objectives and outcomes were accomplished. The Board entered into a written contract detailing the services to be provided by the Cuba Community Development Corporation (CCDC), but did not properly monitor its progress toward meeting CDBG program goals. The CCDC submitted 31 invoices totaling $288,968 for work not yet performed, and made $28,117 in payments to contractors which were not submitted to or approved by the Board. This enabled the CCDC to divert $3,000 of Town grant funds to finance other unrelated CCDC operations. Currently, the CCDC has exhausted the Town's grant funds while still owing contractors $8,925 for completed work and has not returned the diverted grant funds to the Town.

We found that there is inadequate oversight of the Authority's payroll processing and accounting for leave accruals. Due to limited staffing at the Authority, there was no segregation of payroll-related functions. The Office Administrator performed all payroll functions with little or no supervision. Also, the timekeeping system used to record administrative employees' time worked does not accurately capture the hours worked. We found deficiencies for the hours worked for five of the seven administrative employees that tracked their time using the log-in and log-out times on the employees' computer. Finally, seven of the eight part-time employees did not have documented pay rates.

District officials need to improve internal controls over grant programs. The District expended more than $79,400 on grant-related expenditures that either were not approved, not properly supported or not expended for legitimate grant purposes. Further, grant expenditures reported to SED totaling $127,680 lacked sufficient supporting documentation to substantiate employee benefits, salaries and purchased services. As a result, District officials' oversight of grant programs is substantially diminished and they cannot be certain that grant proceeds were expended for authorized grant purposes.

The District reported unexpended general fund deficits for five consecutive years. The deficit was as high as $5.3 million in fiscal year 2008-09. However, the deficit started declining in the 2009-10 fiscal year when SED and DOB authorized tuition increases for the District. The District's enrollment has declined in recent years, which has adversely affected revenues. However, District officials have managed to decrease expenditures to offset the declines in revenues, which helped to relieve the deficit situation. We found that the District could improve its billing and collection procedures. As of June 30, 2013, the District had approximately $2.4 million in accounts receivable, of which $1.2 million (50 percent) had been outstanding for 90 days or more. If the District is unable to collect these outstanding amounts, the District's financial condition will be negatively impacted.

The Supervisor did not properly maintain the Town's accounting records. Specifically, the Supervisor did not record all receipts and disbursements, which left the Town's accounting records incomplete. The Supervisor also made disbursements that were not audited by the Board and were not included on the abstract of audited claims. We also found that bank reconciliations were not prepared. Additionally, the Supervisor did not submit adequate monthly financial reports to the Board and the Board did not perform an annual audit of the Supervisor's records and reports, as required by the Town Law. The lack of adequate and timely accounting records makes it difficult for the Board to determine the Town's true financial condition or effectively monitor the Town's financial operations.

The Board did not establish adequate internal controls or provide sufficient oversight of the District's financial operations. The Board's audit of claims was not effective. We found that almost half of the 60 claims we reviewed, totaling $15,109, had deficiencies such as insufficient supporting documentation, lack of Board approval or were approved by the individual submitting the claim. The District's use of credit cards was not in accordance with Board policy. Of the credit card charges we reviewed, about 60 percent either were not itemized or receipts were not provided to show that they were for valid District expenditures. The District also could have saved approximately $11,000 if District officials were reimbursed for travel costs at Federal reimbursement rates. The Board has not adopted an online banking policy and has not entered into an agreement with the District's bank for electronic transfers. In addition, the Treasurer performed online transactions without Board oversight and bypassed established internal controls over cash disbursements. The Treasurer also failed to file the required annual financial reports with the State Comptroller's Office in a timely manner or provide the Board with a required annual report. Finally, the Board has not obtained an independent audit of the District's finances or length of service award program (LOSAP) as required by law.

The Court was audited by the New York State Office of Court Administration, which released a report in July 2011 that found that at least $89,600 in Court funds were misappropriated by the former Court clerk. Given the past misappropriation of Court funds, we reviewed the Court's financial activity to ensure corrective action has been taken and preventative procedures have been established to safeguard Court assets. Overall, the Justices have established adequate processes and procedures for the Court's financial operations. The Court clerk collects cash receipts, records entries in the accounting system and prepares deposits. The Justices review the deposits to ensure they are accurate and that all receipts are accounted for prior to depositing the receipts. While the Justices properly account for monthly activity and prepare bank reconciliations, we found that the accountability reports were not properly prepared. We prepared accountabilities for both Justices for the months of June, July and August 2013 and found minor variances with both Justices' accountabilities. When the variances were brought to the Court clerk's attention she promptly investigated and accounted for the variances.

The Greene County Industrial Development Agency (GCIDA) entered into contracts in which we believe former GCIDA Board members had prohibited conflicts of interest. Members of the Board served conflicting roles with businesses that received benefits from GCIDA. This includes lease and PILOT agreements related to the construction and renovation of a ski facility; a lease and PILOT agreement relating to the construction of an aircraft component assembly facility; and the sale of land, a line-of-credit and the issuance of bonds with a bank. GCIDA had formal criteria for selecting which firms and businesses received sponsorship and economic development incentives. However, the Board cannot document that project incentives were consistently applied when approving projects because they did not prepare formal documented cost-benefit analyses. Finally, GCIDA does have a process in place to monitor employment goals. However, it does not have a policy that would allow it to effectively hold businesses accountable when they do not comply with employment reporting requirements or meet specific employment goals. Four of 10 businesses receiving GCIDA benefits that we reviewed have not met their employment goals and one business did not comply with employment reporting requirements. In addition, six of 10 PILOT agreements reviewed did not have a recapture clause.

In 1996, the Putnam County Industrial Development Agency (PCIDA) Board established criteria for approving projects, and for evaluating and recapturing benefits from projects that fail to meet their goals. However, the policy has not been evaluated since, and therefore does not reflect changes made by the Board to the recapture provisions that the Board should follow. PCIDA officials do not have project approval criteria that is specific to the County, and they approve individual projects despite a lack of information such as the additional police or emergency services required, the number of existing jobs or a cost-benefit analysis. Officials also do not conduct annual visitations to businesses to determine if projects meet their goals or recapture benefits when they do not. Officials also do not obtain sales tax exemption or capital investment amounts annually, and therefore cannot determine if projects are meeting their related goals or accurately report this information to the Office of the State Comptroller. As a result, there is an increased risk that businesses will receive unnecessary financial assistance and that the businesses will not provide the public benefits that have been promised to the County and local jurisdictions.