We found significant control deficiencies with the Court's operations. The Justices did not ensure that all court fines, fees, and surcharges were properly accounted for. While our testing found that monthly reports were submitted to the Justice Court Fund in a timely manner, they were not always complete and accurate. We also found that bail and partial payments were not properly recorded. Further, the Justices did not ensure that cases were properly reported to the Department of Motor Vehicles.

The Board has not adopted policies and procedures for cash receipts and disbursements to ensure that cash is properly safeguarded. As a result, although press-numbered receipts are issued, the bookkeeper does not sufficiently detail deposit slips to identify each deposit's composition or record cash receipt numbers in the accounting records. In addition, 116 receipts totaling $47,443 were not deposited on a timely basis, 14 disbursements totaling $23,943 never appeared on a warrant for Board approval, and 151 disbursements totaling $532,322 cleared the bank prior to the Board's audit and approval for payment. In addition, there was a lack of segregation between those who use the credit cards and those who oversee compliance with the District's credit card policy, and we identified questionable credit card purchases totaling $5,446 including gift cards totaling $150.

We found that the Board did not ensure that it appropriately identified and evaluated available options before deciding to lease a building. The process used to select a firm to acquire and renovate a building on the Board's behalf was not transparent, and we question whether it was an arm's length transaction. The Board selected an unlikely firm, a nonprofit educational services corporation (Corporation) from the New York-New Jersey metropolitan area that did not have any apparent real estate experience. We also found that the terms and conditions of the lease agreement appear to benefit the Corporation more than the School. We estimate that the lease payments could exceed the Corporation's costs by more than $4.4 million.

The School did not have sufficient Board-approved policies and procedures over the procurement process. Such policies and procedures would provide guidance on when and how to solicit competition, documentation requirements to support purchasing decisions and payments.

From fiscal years 2007-08 through 2011-12, District officials have consistently over-estimated expenditures by a total of $7.1 million and increased the tax levy by 23 percent. These budgeting practices generated approximately $2.1 million in operating surpluses, which caused the unexpended surplus fund balance to exceed statutory limitations for the past five years. For example, at June 30, 2012, the unexpended surplus fund balance exceeded statutory limits by approximately $350,000. In addition, we question the District's need to maintain over $5.8 million in reserves. In addition, extra classroom activity moneys were not maintained in accordance with District policy and Regulations. We found significant weaknesses, including failure to appoint a faculty auditor, as required, and an unauthorized individual making adjustments and entries to student ledgers.

We found that the Board has not adopted appropriate policies and did not receive or review sufficient financial information to appropriately monitor water financial operations. Our examination of the billing and collection of customers within the Village did not disclose any material errors or irregularities. However, we found that the Village has not established formalized, agreed-upon regulations to define and allocate water plant costs for municipal customers. Additionally, the Village is inappropriately billing municipalities for unknown future capital costs, and is holding this money in a reserve that was not legally created.

The Mayor and Board did not properly manage the Village's financial condition because they did not consistently develop sound budget estimates. Further, they did not adequately monitor actual results against the budget. As a result, the unexpended surplus fund balances remained high while the Village's real property tax levy continued to increase slightly by 7 percent from 2007 to 2012. As of May 31, 2012, the general, water and sewer funds have accumulated significant unexpended surplus funds and have not established formal reserves for future repairs and capital needs.

The Board generally expended casino compact revenue during our audit period in accordance with the nature of the approved spending plans. However, expenditures totaling $38,322 were not adequately supported and a payment of $36,358 was not Board-authorized. Further, the records of moneys disbursed did not always distinguish expenditures by spending plan and intended uses.

We found that the County has a written plan for bridge maintenance and repairs. During our audit period, the County maintained average bridge ratings and a consistent level of funding for bridge maintenance, repairs, and replacements. However, we found the County does not track maintenance and repairs by bridge, which could make it more difficult to determine when it is more economical to replace rather than repair a bridge.

The County is fiscally stressed. While the Legislature and County management are aware of the County's financial position, and they have developed reasonable budgetary estimates for most major revenues and expenditures, the County's financial condition has declined over the last few years. For the years between 2007 and 2011, the County has spent $6.7 million more than they received; three of those five years have suffered operational deficits. Also, while the County does include a five-year capital plan in their adopted budget, they do not utilize a multiyear financial plan for estimating operating revenues and appropriations. In addition, the general fund balance is artificially inflated due to a $4.5 million Nursing Home receivable that is unlikely to be collected. Because of these shortfalls, County management has eliminated 188 positions over the last three years. These staff reductions could result in significant delays for necessary services and an increased workload for the remaining staff.

The Board is not able to routinely monitor actual revenues and expenditures against budgeted estimates throughout the year because the Supervisor does not maintain accounting records in a timely manner. As of December 2012, the Supervisor had not made postings to the accounting records since March 2012. Because the Supervisor did not maintain the accounting records in a timely manner, she could not prepare periodic financial reports necessary for the Board to compare actual revenues and expenditures to the budgeted amounts on a regular basis and make applicable budgetary amendments. As a result, the Town has realized negative fiscal trends in its general and highway funds over the past several years.

Although the County has not developed a written plan for bridge maintenance and repair, it has taken action in recent years to improve and maintain bridge ratings. We tested the flags issued during the last five years of our audit period to determine if the County complied with NYSDOT's response and action requirements. Of the 83 flags we tested, the County lacked sufficient documentation for nine flags. We could not determine if the County had responded to these nine flags in a timely manner. For the remaining 74 flags for which the County provided documentation, the County responded in a timely manner to 40 flags, and failed to respond in a timely manner to 34 flags. Of these 34 flags, four were red, which indicates that structural failure was a potential outcome before the next bridge inspection. The County's response to these four flags was an average of 37 days later (79 days) than NYSDOT's six-week response requirement.

We found the County does not track maintenance and repairs by bridge, which could make it more difficult to determine when it is more economical to replace rather than repair a bridge. Further, for the nine available and completed fiscal years from 2002 through 2011, the County had an average of 21. We examined all 89 flags issued during the period 2007 to 2011 to review for timely responses and/or actions on behalf of the County. Of the 89 flags reviewed, County officials could not produce sufficient response documentation for 72 flags. Therefore, we could not determine if the County had responded to these flags in a timely manner.

The District has inappropriately provided individual whole life insurance policies to its Commissioners and employees. The Board has adopted a personnel policy that includes a provision that any Commissioner or employee, except temporary and seasonal, will be provided with a life insurance policy that, after 10 years, will be transferred to them upon retirement.

We reviewed the general and highway fund budgets and found that overall, they were reasonable and supported, except for sales tax and fund balance estimates in the general fund. The Board has been adopting budgets that consistently underestimate sales tax revenues. In addition, on an annual basis, the Board appropriates fund balance as a financing source to balance the budget. However, the Town's operations generally resulted in surpluses, where revenues exceeded expenditures, due primarily to the underestimation of sales tax. Because of this, fund balance was not needed to finance operations. Due to the operating surpluses experienced by the Town, unexpended surplus funds have increased even further in the general fund.

We found that the County has a written plan for bridge maintenance and repairs. This plan addresses cyclical maintenance and it excludes bridges slated for major renovations or repairs from the cyclical maintenance. We tested the flags issued during the last five years of our audit period to determine if the County complied with the NYSDOT's response and action requirements. Of the 65 flags issued, County officials could not produce response documentation for five flags. Therefore, we could not determine if the County had responded to these flags in a timely manner. For the remaining 60 flags for which the County provided documentation, the County responded in a timely manner to 58 flags and failed to respond in a timely manner to two flags.

We found that the County does have a written plan for bridge maintenance; however, it has not been formally approved by the Legislature. This plan includes cyclical maintenance and corrective action programs. Additionally, we found the County does not track maintenance and repairs by bridge, which could make it more difficult to determine when it is more economical to replace rather than repair a bridge.

While the County does not have a written plan in place, it has implemented practices that have served to improve bridge ratings over an extended period of time and have maintained consistent ratings over the past 10 years. The County has reduced the number of deficient bridges in recent years, primarily by replacing and completely renovating six bridges each year. Additionally, the County does not track all maintenance and repairs by bridge, unless the bridge is being completely replaced or rehabilitated.

The District has experienced both planned and unplanned operating deficits in its general fund over the last two fiscal years. These deficits were caused by inaccurate budget estimates. As a result of the operating deficits, the District's fund balance has been depleted. Further, it is estimated that the District will experience a deficit fund balance of $8.2 million for the 2012-13 fiscal year, which is $800,000 more than the $7.4 million budget note issued to fund the deficit. District officials planned to use the proceeds from a property sale to retire the budget note. However, the sale was delayed due to a lawsuit filed with the State Education Department (SED). Unless these budgetary and cash flow problems are addressed, future District operations could be adversely impacted.

The Board did not properly segregate the Clerk-Treasurer's financial duties or provide oversight of her work, did not require the Clerk-Treasurer to provide monthly financial reports for monitoring the Village's financial condition, and did not ensure that the Village's annual financial reports were filed with OSC in a timely manner. Further, the Board did not conduct an annual audit of the Clerk-Treasurer's records and reports. Due to the lack of sufficient Board oversight and monitoring, the Village's actual financial activities varied greatly from the Board's adopted budgets. For example, found that 20 out of 43 of the 2011-12 adopted budget expenditure lines were over-expended by a total of more than $89,000 in the general fund, resulting in the general fund's total expenditures exceeding appropriations by approximately $55,900, or 50 percent of its budget. This significant variance was partially offset by general fund revenues, which exceeded the budgeted revenues by approximately $52,700 (excluding appropriated fund balance), leading to an operating deficit of approximately $13,200.