We found that the Board did not adopt reasonable budgets that were based on realistic estimates of revenues and expenditures. The Board did not allocate adequate revenues to the TOV highway fund, which caused the TOV highway fund to report a deficit fund balance since 2007. At the same time, the Board appropriated nonexistent fund balance in the highway fund budget for three of the last five fiscal years, all the while knowing that the TOV highway fund had a deficit fund balance. Furthermore, the Board did not audit or contract with an independent accountant to audit the books and records of the Supervisor or Town Clerk and did not develop a multi-year financial plan to address the Town's long-term operational needs. In addition, the Board has not adopted comprehensive IT policies and procedures or a disaster recovery plan to follow in the event of emergency. The Town did not designate an administrator over the Town's financial software application who is independent of the financial recordkeeping functions. Finally, the Town does not maintain an inventory of its IT assets.

We identified weaknesses in the controls over the collection, recording, reconciliation, and enforcement of parking ticket fines. The Village does not participate in the New York State Department of Motor Vehicle (DMV) Scofflaw Program for addressing unpaid violations. By participating, the Village could potentially increase its parking fine revenues by nearly $23,000. We also found that the Court's case files and bail records are not accurate and complete, and the two Justices do not maintain an accurate computerized bail list or perform monthly bank reconciliations and accountabilities. As a result, there are discrepancies between the accounting records maintained for bail, the Court's manual check register, and the computerized court case records. Further, neither the manual check register nor the computerized accounting records agrees with the bail on deposit in the bail bank account.

The Town's accounting records are in poor condition and do not provide an accurate portrait of its financial condition. In fact, the Town's general fund was overstated by a total of $247,036 in fiscal year 2011, which was 30 percent of the budgeted revenues. This overstatement occurred because the Town did not properly account for property and sales tax revenue. The Supervisor did not maintain complete, accurate and up-to-date accounting records and has not filed the AUD for 2010 and 2011. Town officials have not performed bank reconciliations for 2011 or 2012. Finally, former employees still had online banking user accounts, and the Supervisor and bookkeeper had excessive online banking privileges because the Board failed to establish policies and procedures for online banking.

Controls over the Company's fiscal activities were weak. The Board failed to provide adequate guidance to those responsible for receiving and depositing cash and exercised little oversight of the Treasurer and other officials who performed these duties. We also found that check registers are not maintained to document bank deposits, withdrawals, or cash balances. A revenue ledger is not maintained, bank reconciliations are not performed, and the bank statements are not reviewed by anyone other than the Treasurer. Adequate internal controls have not been established over fundraising activities. Furthermore, the Board did not review and approve all bills prior to payment or evidence their approval in the minutes. Finally, we found no authorization in the minutes or elsewhere for $7,500 of non-check bank withdrawals that occurred during our audit period.

Controls over the Company's fiscal activities were weak. The Board failed to provide adequate guidance to those responsible for receiving and depositing cash and exercised little oversight of the Treasurer and other officials who performed these duties. Check registers are not maintained to track bank deposits, withdrawals, or cash balances. Furthermore, revenue and expenditure ledgers are not maintained, bank reconciliations are not performed, and the bank statements are not reviewed by anyone other than the Treasurer. Furthermore, there is no record that Audit Committee audited and approved the bills for payment, as the warrant listing the bills to be paid was unsigned. Finally, adequate internal controls have not been established over fundraising activities.

We found that the Supervisor has not fulfilled even the most basic of financial responsibilities. Financial records are incomplete or missing and there is no way to accurately determine the Town's financial condition. Given the lack of records and the Supervisor's control over all aspects of the Town's finances, there is no way to be sure that all funds have been accounted for and used solely for Town purposes. In addition, the Supervisor has ignored and not complied with State laws and requirements. For example, the Supervisor has not filed an AUD for 2008 or any of the subsequent years and did not file its 2012 property tax cap computation with OSC. Our calculation of the property tax cap limitation resulted in the Town property tax levy exceeding the cap limit by approximately $11,800. Finally, the Board did not audit the books and records of the Supervisor or Town Clerk.

We found that the current Justices have developed adequate internal controls over the Court's financial operations, with the exception of performing accountabilities. Both the Justices and the Board provided adequate oversight and balanced their checkbooks to ensure that cash was properly safeguarded. However, the Justices did not perform accountabilities reconciling Court assets to known liabilities. Also, one Justice failed to close his bank account as required when he resigned.

The Supervisor did not maintain accurate computerized accounting records. Because the bookkeeper did not always enter all transactions in the computerized accounting system, adjusted bank balances were approximately $997,800 less than cash balances in the Town's computerized accounting records. In addition, the Justice did not properly oversee Court operations. Accountabilities were never performed and deposits were not always made timely. As a result, the Court's liabilities exceeded assets by $1,442 at June 29, 2012. We identified the cause for $560 of the shortage; however, the cause of the remaining $882 has not been identified.

We reviewed the internal controls over Court operations and the Justices' records and reports and found that the duties were not segregated because the Justices performed all duties including handling of cash receipts. The lack of segregation of duties make the annual audit even more important, However, Town officials failed to provide sufficient evidence that annual audits of the Justices' books and records were conducted, and the Justices did not always enforce unpaid tickets or report transactions to DMV in a timely manner.

The Board did not adopt a policy or develop procedures to govern the level of fund balance maintained. Additionally, the Board had not developed accurate budget estimates or a formal, comprehensive multi-year financial and capital plan to adequately address the Town's long-term operational and capital needs. As a result, the general fund has retained excessive amounts of unexpended surplus fund balance.

City officials have severely mismanaged the CDBG program and have put significant public funds at risk. City officials have disbursed CDBG funds without the most basic of documentation to support the expenses and have used the funds at times to pay for a variety of miscellaneous expenses that have no connection to the CDBG program. Most disturbing is that some of these transactions have been recorded in a manner to apparently hide the true nature of the transactions.