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 seven flags (the number of deficient bridges is generally higher for the years in which assessments took place). We examined all 48 flags issued during the period 2007 to 2011 to review for timely responses and/or actions on behalf of the County. Of the 48 flags examined, 31 lacked any documentation regarding a County response to NYSDOT, so we could not determine if the County responded timely. The County's response to these four flags was an average of ten days later (52 days) than NYSDOT's six-week response requirement.

The Board should improve its oversight of the District's financial activities. The Board has not adopted a code of ethics or procurement and investment policies as required by GML. As a result, the Board has not set appropriate expectations for District operations. We found the District has deposits and short-term investments in a credit union which is not a financial institution authorized by GML. As of December 31, 2012, the District had $585,045 (or 99 percent of the District's total cash on hand) in cash deposits and certificates of deposits at the credit union. The former Treasurer did not complete monthly bank reconciliations during the period January 1, 2011, through June 30, 2012, and the 2011 annual financial report filed with OSC was not accurate. Finally, prior to the current Treasurer taking office, the Board did not perform a thorough and timely audit of claims prior to payment.

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.

The Board did not provide sufficient oversight of the financial duties performed by the former Treasurer, allowing the apparent misappropriation of over $59,000 in Village funds without detection. This included over $46,000 of inappropriate cash disbursements and almost $13,000 of inappropriate payroll payments. This occurred because the Board allowed the former Treasurer to perform all cash disbursement duties with no oversight. The Board did not review the bank statements or the bank reconciliations. Further, the former Treasurer did not maintain accurate financial records. In addition, the Board did not audit and approve claims prior to payment and did not provide for an audit of the former Treasurer's financial records for the fiscal years ended February 28, 2011 and February 28, 2012. Further, the Board did not require the former or current Treasurer to provide monthly financial reports for monitoring cash flow and fund balance and, therefore, was unable to adequately manage the Village's operations and fiscal health. Finally, although the Board did not pass a resolution establishing a petty cash fund, the former Treasurer issued and cashed 36 petty cash checks that averaged approximately $340 each.

The District does not have adequate financial policies and procedures. While the Board has adopted purchasing and code of ethics policies, it has not adopted an investment policy, as required by statute. The Board also has not ensured that procedures are in place for financial recording and reporting. We found that the Treasurer did not submit monthly financial reports to the Board, but has filed the required annual financial report as of fiscal year 2011 with the OSC. The Board does authorize each claim for payment and indicates its approval by affixing each member's signature on the warrant. Finally, the Treasurer was not maintaining accurate cash balances for the District's checking and savings accounts.

We found that the Town could potentially save as much as $7,000 annually if it used assets that it already owns to process and print payroll checks in house rather than using a contractor to process payroll. In addition, Town officials cannot identify which of the two clerks performed a transaction because their system identifications were identical. Also, we identified 36 cases that were deleted from the Court's system; the reasons for the deletions were not documented. Further, 166 cases were not reported to the State Comptroller's Justice Court Fund. The Town also did not implement a comprehensive data back-up procedure. In addition, we found inappropriate use of the Town's computers at the highway department. Finally, Town officials did not ensure that user access rights were terminated upon separation from service, and users did not log off the system when they were not using it.

District officials have established adequate controls over the claims processing function that allow claims to be audited in a timely manner and ensure the claims are properly supported. Our examination revealed only minor deficiencies, which we discussed with District officials.

The City's financial condition has deteriorated as a result of the Council's decisions when developing and adopting annual operating budgets and its failure to appropriately monitor financial operations. At June 30, 2009, the City's total unexpended surplus for its major operating funds (general, water and sewer) was slightly over $6 million. By June 30, 2012, the City's total unexpended deficit for these major operating funds was more than $15 million. From the 2008-09 through the 2011-12 fiscal years, these operating funds experienced total combined operating deficits of almost $18 million primarily because the Council adopted budgets that over-estimated revenues and under-estimated expenditures. As a result, City officials relied on interfund advances, budget notes and long-term financing to fund operations. In addition, City officials have not formalized policies and procedures over Department of Parks and Recreation cash collections. As a result, personnel have developed their own procedures which may not be consistent with good internal control practices.

The Board has appointed FREE to serve as the designated representative for the Treasurer of the School. FREE performs virtually all aspects of the School’s financial operations, making monitoring even more essential.

The Board did not develop accurate budget estimates for the general fund and did not properly monitor and control actual activity against those estimates. The Board has over-estimated revenues for the years 2008 through 2012 by an aggregate of more than $126,000, which is more than a 12 percent average shortfall. As a result, at the end of 2012 the Town had a fund balance deficit of $3,586. In addition, Town officials cannot ensure that cash disbursements are only made for proper Town purposes. While the Board reviewed all claims that were presented to it for audit, it approved claims totaling $6,183 that did not describe the goods purchased clearly or at all. Further, because Town officials have not established controls over fuel inventories, no one can be sure that fuel purchased by the Town is used only for Town vehicles and equipment.

County officials have not established policies and procedures to monitor the Microenterprise Development Loan Fund (MDLF) Program. Although the County's contract with the Business Development Corporation (BDC) requires quarterly and annual reporting, BDC provided untimely and insufficiently detailed activity reports. County officials did not have sufficient information to address delinquent balances for nine loans totaling $24,847. For the Children with Special Needs program, we found that client files were not always available or complete. We reviewed the files for the 224 children that were available and found that the County did not maintain one or more pieces of required documentation in the files for 19 of these children, for whom the County paid claims totaling $161,482. We also reviewed 16 transportation claims totaling $100,566 and found exceptions with five claims totaling $85,654. Finally, the Legislature has not established policies and procedures relating to the security of data and assets, including user access, a formal disaster recovery plan, and IT security awareness training for users of the County network.

During the four-year period 2009 through 2012, the Board did not prepare District budgets in the format prescribed by OSC or prepare budgets based on reasonable estimates. Due to the continual overestimating of expenditures, the District generated operating surpluses totaling $2,520,795 from 2009 through 2012. In addition, the District did not calculate its statutory spending limits correctly for 2009 through 2013, resulting in budgeted appropriations that exceeded the statutory limit by as much as $21,500 in 2010, 2012, and 2013. Finally, the Board did not receive complete and accurate financial information from the Treasurer. Therefore, the Board did not always have the necessary information to effectively monitor the District's budget.

The District's budgets from fiscal years 2008 through 2012 were unrealistic. Total expenditures during this period were approximately $777,000 less than appropriations. These unrealistic budgets caused total fund balance to increase significantly. At the end of 2012, total fund balance was nearly double the ensuing year's appropriations, and total fund balance is projected to remain above 100 percent of the subsequent year's appropriations through 2031. The District continues to raise taxes unnecessarily even though it has excessive fund balance. These actions are not in the best interest of District taxpayers.

School officials routinely purchased school equipment and furnishings from a limited group of four vendors that were affiliated with one another. The required number of quotes was not always obtained, and quotes were sometimes dated after the purchase was made. School officials did not document verbal quotes, making it impossible to verify that the lowest quote was used or that the School paid the correct amount. School officials also received quotes for school equipment and furnishings from vendors that did not specialize in such items, and did not attempt to identify more suitable vendors that could have offered more competitive prices. As a result, we question the prudence of $383,390 in purchases which the School likely could have obtained at lower prices. In addition, some of the purchased items were in fact resold to the School after an affiliated vendor purchased the items online and marked up the price. Had School officials purchased these items either directly from the original vendor or through State contract, they could have saved $5,220 on total purchases of $54,940. We also identified $5,500 in contractual discounts due to the School from its vendor of student information system software and training. Finally, The Director of Operations does not ensure all student information is recorded accurately prior to billing their school districts, and does not verify the accuracy of the year-end reconciliation of the School's student information system with billings, which should identify any moneys that the School owes to the resident districts (over-billings) or vice versa (under-billings).

The District's non-instructional employees generally earn a fixed number of days of leave time each year for vacation, illness or personal use, and, in some cases, receive cash payments for a portion of those days that are unused at retirement. However, it appears the leave time records for 12 employees were inaccurate, with balances that exceeded or were less than the amounts allowed by 578.96 days, valued at $94,480, and 26.7 days, valued at $2,148. When leave time records are inaccurate, the District is susceptible to compensating employees at unauthorized amounts. In addition, the former Superintendant was overpaid by $11,083 at retirement for 17.5 vacation days to which he was not entitled and a former employee was entitled to an additional $13,773 at retirement because he was not paid for 56.25 sick days earned. In addition, 26 claims totaling $83,562 contained no documentation to indicate they were audited by the claims auditor and 17 claims totaling $41,226 were not audited until after payment.

The Justice was absent for the majority of our audit period; during this time, the Court operated with three temporarily assigned Justices. We found that important recordkeeping functions were not performed to ensure accountability over the Court's records. Specifically, the Justice and assigned Justices did not review bank statements or reconciliations, and did not review system activity to detect and correct errors. We also found that assigned Justices did not maintain separate bank accounts to track incoming Court moneys, and the Justice and assigned Justices did not personally submit their monthly reports to JCF or ensure that the monthly reports were submitted timely to OSC. In addition, the Board does not ensure that a timely annual audit of the Court's books and records is performed.

The Board has retained excessive levels of fund balance. Fund balance as of December 31, 2012 totaled approximately $229,000 which represents 260 percent of next year's budgeted appropriations. District officials told us that approximately $189,000 of this fund balance was for a reserve fund established approximately 17 years ago. District officials were unable to provide us with formal documentation of the establishment of this reserve fund. Furthermore, even if this money was reserved, the current unrestricted, unappropriated fund balance is still excessive at 44 percent of next year's budgeted appropriations. In addition, the Board does not conduct an annual audit of the Treasurer's records or contract with an independent auditor to perform such an audit to ensure that District funds were used for legitimate District purposes.

We found that the Justices, and the Court Clerk, did not prepare monthly accountabilities of Court assets and liabilities and former Justices did not properly close out their accounts. Our audit disclosed that one of the former Justices had a shortage of $1,026 and the other former Justice has unidentified funds of $699. In addition, pending tickets were not always enforced in a timely manner and dismissed tickets were not always reported to the JCF. Therefore, the Town may not have collected all fines and fees to which it is entitled. Finally, the Board did not conduct an effective audit of the Court's records and did not properly segregate the Court Clerk's duties or establish compensating controls.

The President did not ensure disbursements were made for proper company purposes. The President allowed the Treasurer to pay bills without evidence of Company approval for the majority of the transactions we tested. Seventy-six payments totaling $27,600 of the 100 disbursements we tested had no evidence of company approval. Nine of the 40 checks totaling $8,700 and 20 of the 60 debit card transactions totaling $7,500 had no documentation available to identify the purposes of the payments. These deficiencies occurred because the Treasurer performed all duties related to cash disbursements without adequate oversight.

During 2011, the County paid $230,686 for inmate healthcare services for inpatient and outpatient care. We reviewed 59 vouchers totaling $93,038 for inmate healthcare services and found discrepancies with 18 claims totaling $88,540. These discrepancies occurred because County officials did not have adequate procedures to review invoices for inpatient hospital services provided to County inmates and verify that the correct Medicaid Diagnostic Related Group (DRG) rates were used.