The Board is not providing adequate oversight of the Dog Control Officer and Code Enforcement Officer. The Board did not require the Officers to remit the fees they collected to the Town. Instead, it approved both Officers to retain fees collected on the Town's behalf which circumvented Town Law. In addition, we found that the Board gave both Officers approval to open and maintain bank accounts for cash collections and disbursements for their respective operations with no Board oversight. Furthermore, the Board's review of claims was inadequate, resulting in claims being paid prior to Board audit and approval, certain claims lacking adequate supporting documentation and payments for goods and services that were not for appropriate Town purposes. The Board did not audit the records of the Supervisor, Town Clerk, Dog Control Officer and Code Enforcement Officer.

The Authority has established and designed an adequate system of internal controls over claims processing.

The Board does not adequately audit claims presented for payment. The Board does not require documents such as receiving reports, quotes, or bid or State and County contract information be submitted for claims review. In addition, we reviewed 73 payments and found that 27 payments totaling $24,823 did not have signed receiving documentation, and four payments that required quotes totaling $102,801 did not have the required quotes or alternate documentation. In addition, internal controls over IT do not adequately protect electronic data. The Board has not adopted an acceptable computer use policy, a breach notification policy or a disaster recovery plan.

The District's procurement policy does not require the use of competitive methods when procuring professional services. We reviewed all five professional services providers who received at least $20,000 in payments during our audit period. District officials did not solicit competition for the services provided by any of the five professionals, who were paid a total of $343,289. The payments comprised $143,989 to an insurance agency, $79,134 for physical training services, $54,181 for legal services, $39,500 for accounting services, and $26,485 for engineering consulting services. In addition, although the District entered into written agreements with the physical trainer and the engineering consultant, there are no Board resolutions approving these contracts. Further, the payments to the physical trainer were not in accordance with the written agreement. While the written agreement, dated May 2007, states that the trainer is to be paid $40 per hour, during our audit period he was paid $50 per hour for his services.

The Board and Town officials were aware of revenue shortfalls and did not take the appropriate action to maintain the sewer and water districts' financial stability. In addition, the Board adopted budgets for the sewer and water districts that were not reasonable or structurally balanced. This resulted in annual operating deficits, declining fund balances and declining cash balances. Finally, the Board has not adopted a long-term capital plan or a long-term financial plan to address the corresponding costs and future repairs and maintenance costs.

The Board has not established written policies and procedures for cash receipts and disbursements, claims processing or information technology. The Board has not adequately segregated the Treasurer's duties or implemented mitigating controls. The District entered into a new three-year lease with the Golden Glow Volunteer Fire Company effective January 1, 2011 to pay rent of $30,000 annually for the two existing firehouses, which was double the $15,000 amount paid in 2010. When the new firehouse construction is complete, the two existing firehouses will be sold. However, the rent amount will remain at $30,000 per year. The Board did not perform a cost-benefit analysis of this transaction or determine if the rental price was at fair market value. Given that the payment for at least the first two years of the lease doubled the cost for the same space, it is questionable that the District has been paying fair market value. Instead, it appears that the increase was intended to subsidize the construction of the new firehouse that will be privately held. Furthermore, statutory budget constraints may limit the District's ability to absorb any future increases in the lease payment.

The Board Chairman told us that the Board conducts an internal review of the Secretary-Treasurer's financial records, bank statements, and canceled checks two or three times throughout the year but could not provide us with any written evidence of this review. The Treasurer did not file the required annual financial reports with OSC for the 2009, 2010, and 2011 fiscal years. The Board was unable to provide us with an adopted investment policy and a code of ethics, which are required by law. As of August 31, 2012, the District reported an equipment capital reserve totaling $324,836 and a building capital reserve totaling $227,122. The Secretary-Treasurer does not maintain accounting records for each reserve fund as required. From January 1, 2010, to August 31, 2012, the Board financed the reserves with budgetary appropriations, operating surplus at the end of the year, and interest income, totaling $71,873 for the equipment reserve and $118,429 for the building reserve. The District did not make any expenditures from the reserve funds during this time period.

The Board and Mayor did not ensure that only authorized disbursements were made. Payments totaling $1,386 were made to the Clerk-Treasurer without Board approval and all employees had the wrong amounts withheld for health insurance. In addition, 447 checks totaling approximately $325,000 were inappropriately paid prior to Board audit.

The Company did not adequately plan for the construction of the new firehouse. Because the Company did not solicit competitive bids for this large building project, it cannot be assured it obtained the best price. Furthermore the Company's plan to repay the debt issued to finance construction is based on contingencies such as the sale of the two existing firehouses, continuation of increased rent from the District, and fundraising in amounts that far exceed amounts raised in the past. We also found that the Officers and Directors had not established written policies and procedures governing cash receipts and disbursements. As a result, the Treasurer's duties are not adequately segregated and there is a lack of ongoing, regular oversight by the Officers and Directors as a compensating control.

The Board adopted budgets during our scope period that cut costs by abolishing positions, outsourcing services or sharing them with other districts, and saving money on energy costs. Given the District's declining enrollment and the current economic climate, cost-cutting is prudent. However, the District's budgets did not cut revenues at the same pace, resulting in the District's accumulating an increasing amount of money in restricted fund balance, or reserves, and building up amounts of unexpended surplus funds that exceeded the legal limit in the past two years. Although the District appropriated more than $1 million in unexpended surplus each year to help finance the ensuing year's budget, the District did not use these funds because it generated a surplus each year. We also found that the Board has not developed a multi-year financial plan to improve the budget development process.

During 2008-09, 2009-10 and 2010-11, the Board overestimated expenditures by approximately $1.9 million. Expenditures were overestimated by over $4 million in the 2011-12 budget. The District's tax certiorari fund was overfunded by $207,000 to $636,000 for the three fiscal years ended June 30, 2010. Finally, the former Treasurer did not prepare and present monthly reports to the Board. As of May 9, 2012, the Board did not receive and discuss the monthly Treasurer's reports for the period July 2011 through March 2012. Further, bank reconciliations for the general fund for July 2011 through December 2011, and January 2012 and February 2012 were prepared in March 2012 and April 2012, respectively. Budget status reports for the period July 2011 through February 2012 were not submitted as of May 9, 2012.

We found that seven of the eight municipalities we audited failed to conduct background checks on all of the individuals who deliver their youth program services. Only the Town of Clifton Park annually screened all program personnel against the Division of Criminal Justice Services' Sex Offender Registry and other resources. Two municipalities (Town of Manlius and the City of New Rochelle) only screened personnel providing programs where the State mandates screening, because they believe the application process itself is a deterrent. The remaining five municipalities performed some screening, but did not do it consistently or did not document the date and results of the screening process. Fortunately, our tests of the 1,994 individuals who delivered youth program services in these municipalities did not identify any persons with sex offender or significant criminal histories.

The Board has not established, or reviewed and updated, policies as required by law and sound business practices.

The Executive Director received $6,400 in improper stipends and sold more unused vacation leave than her employment contract allowed. She also has improperly accrued more vacation leave than authorized and without Board approval. This occurred because the Board did not provide sufficient oversight of the Executive Director.

We found that generally the County processes SNAP applications accurately and in a timely manner. However, the County's process could be improved. We identified 27 duplicate payments for 13 clients, totaling $7,523. This was due to inadequate communication between social welfare examiners in two different County Social Services programs. In addition, we found that 10 out of 45 cases reviewed lacked certain documentation such as age, identity, income, shelter, or recertification. We also found that all 25 child care cases reviewed were eligible for child care assistance and had been recertified for assistance every six months. However, we were unable to determine if child care was only provided when the client was at work or school because DSS does not require individuals to submit work schedules.

Internal controls over the Clerk were not appropriately designed or operating effectively, which allowed a shortage of $4,134 to occur and not be detected. The Clerk had no record of payment or enforcement of unpaid sewer bills totaling approximately $8,500 including her own, which totaled $950 and is included in the $4,134. Furthermore, the Clerk discarded tax stubs which prevented us from verifying if she paid $970 of her own taxes, and the Clerk backdated tax collections to avoid imposing late penalties totaling $569, including her own which totaled $102. Finally, the Clerk received apparent duplicate payments for tax bills resulting in overpayments totaling approximately $2,600 that have not been refunded to the appropriate taxpayers or banks. The Board failed to provide oversight including performing an adequate audit of the Clerk's records and documenting the records reviewed and the results of the audit in the minutes. The Board members and the Clerk failed to address similar findings in our 1999 and 2001 audit reports. Had they done so, the shortage may have been prevented.

The Board audits District claims; however, the audit of some claims was not in compliance with Town Law. Although the Board approves claims at its monthly meetings, the Treasurer processes and pays certain claims prior to the Board's audit. In addition, District officials passed a resolution to pay “recurring” bills prior to the Board's audit instead of the specific exceptions allowed by Town Law.

City officials did not exercise proper oversight of cash receipts from waste water, park and recreation, or building permit fees. City officials did not establish comprehensive written policies and procedures that provide adequate guidance and internal controls over the cash receipt function. For example, invoices for payment of sludge fees were not always billed to customers. Due to the lack of the use of sequential receipts there is no guarantee that all payments for building permits and parks and recreation fees are being remitted to the Clerk. In addition, internal controls over the issuance of parking tickets were not established to provide reasonable assurance that all tickets were accounted for. Procedures for the collection and payment of delinquent taxes are not in compliance with the Law. Finally, City officials did not adopt a comprehensive IT security plan, disaster recovery plan and breach notification policy.

The Town receives a fleet discount by purchasing fuel from a national gas station chain. We reviewed the Town's fuel purchases from January 2011 through June 2012 totaling approximately $184,850 and found that Town officials made purchases in excess of the bidding threshold without obtaining competitive bids. This happened because the Highway Superintendent did not adhere to GML or the Board-adopted procurement policy when making fuel purchases. However, although the Highway Superintendent did not seek competition for the Town's fuel purchases, we found that the Town paid the lowest price compared to available State and County contract prices.

The District spent more than $50,000 on a contract with a certified public accountant (CPA) to provide services as the District's claims auditor and the CPA did not perform the services in accordance with the obligations set forth in the contract. Of the 50 claims we reviewed, 29 claims totaling $210,190 were approved without the necessary documentation to support the claim being audited. In addition, the District purchased services for web hosting, spam, and virus filtering totaling $8,205 from a company owned by a District employee. Although this did not result in a prohibited conflict of interest, the employee did not disclose his interest in the company in writing to the supervisor or the Board as required by law. Further, because the purchasing agent did not effectively monitor the District's purchasing process, District staff made purchases totaling $110,010 that did not comply with District policies and may not be the most economical use of taxpayer moneys. Finally, we found that users were granted access to functions of the financial software applications that they did not need in order to fulfill their day-to-day job responsibilities.