The Board did not develop and manage a comprehensive investment program to ensure interest earnings were maximized.

The Board and District officials need to improve their budgeting practices to more effectively manage the general fund balance and reserve funds.

The Board of Directors did not provide proper oversight of the use of grant funds and credit cards.

The Town Clerk (Clerk) did not record, deposit, remit and report collections in a timely and accurate manner and the Board did not ensure that Town credit cards were used for appropriate purposes.

District officials accurately allocated personnel costs between District and State grant activities.

Town officials did not always competitively procure goods and services.

The Town Clerk did not remit collections or always deposit collections in a timely manner. Taxes collected were remitted bi-weekly to the Supervisor in January of both years instead of weekly resulting in $550,050 in 2018 and $693,826 in 2019 being remitted to the Supervisor in an untimely manner. $100,000 in 2018 and $100,000 in 2019 was remitted untimely to the Treasurer. The Clerk deposited 21 tax payments totaling $351,529 in 2018 from two to 18 days after receipt instead of within 24 hours. In four instances totaling $1,763 in 2018 and one instance totaling $326 in 2019 the Clerk did not deposit Clerk fees within the required time frame.

The Board and District officials did not properly manage fund balance. The District's financial reserve plan states that the District will reduce surplus fund balance as recommended by our previous Report and the Board's fund balance policy states that it will strive to ensure that surplus fund balance does not exceed 4 percent. However, neither of these internal controls were sufficient to prevent the District from continuing to accumulate excessive surplus fund balance. The Board and District officials asserted to us that they intentionally plan to maintain surplus fund balance in excess of the legal limit. Surplus fund balance continued to consistently exceed the 4 percent limit by an annual average of 9 percentage points, or approximately $2 million. The Board and District officials consistently overestimated appropriations and appropriated fund balance for planned operating deficits that never occurred.

The Board, District officials and the claims auditor could improve the audit of claims. We found of the 50 claims totaling $528,778 reviewed, 45 claims totaling $338,391 had at least one exception, such as lack of itemized receipts or invoices and no evidence of bids or quotes. The claims auditor did not have well-defined duties and did not report claims audit results directly to the Board.

District officials need to improve the separation payment procedures. Officials paid five former administrators a total of $24,989 for accrued unused vacation leave upon separation from the District based on past practice, even though their individual employment agreements did not provide for such payments. Officials did not realize the former Superintendent was to reimburse the District $2,813 for previously received tuition assistance upon his separation from the District. The District received the $2,813 payment from the former Superintendent in February 2020. Had District officials reviewed the employment agreement terms and payment calculations for accrued unused vacation leave prior to employee separations, they may have avoided making payments that were not specified in the agreements, detected and prevented the erroneous underpayment of $773 to the former Superintendent and identified the reimbursement he owed for tuition assistance upon his separation.

The Board did not provide sufficient oversight of the Fonda-Fultonville Joint Wastewater Facility (Facility). The Villages of Fonda and Fultonville entered into an amended intermunicipal agreement on May 1, 1997 to operate the Facility. The Board did not: Act in accordance with the intermunicipal agreement. Ensure that the former Chairman and former Fiscal Officer maintained adequate accounting records or provide adequate oversight over financial operations. Routinely meet to audit and approve claims for payment as required by the agreement. Approve and monitor vendor contracts. In addition, due to inadequate records, the former Fiscal Officer was unable to provide the Board with any financial reports or accounting of money collected and disbursed during our audit period.

District officials did not transparently fund or use reserve funds. The Board and District officials did not include all funding of reserves in the annual budget or publish the required legal notices when using reserves, District voters were not properly informed and did not have the opportunity to voice their opinion on the District's funding and use of reserves. The District's annual budget included $100,000 each year labeled as “transfer to other funds” which officials told us was intended to fund the capital reserves. During this same period, capital reserves were funded with over $1 million, or $500,000 (50 percent) more than budgeted. In particular, since 2016, the District has funded reserves with an average of $210,000 annually.

Cash receipts were not remitted timely, accurately and intact and records were inadequate. Cash receipts were not remitted timely and intact, resulting in discrepancies with 47 of 76 remittances (62 percent) to the Town Clerk. Center cash collection records were inadequate and incomplete. We found that Town officials were unable to locate 41 special permits issued and three press-numbered receipts were missing from the receipt books.

The College is overpaying for health insurance and health insurance buyout payments are inaccurate. The Rockland County Community College (College) is a component unit of Rockland County (County). The County administers the College's health (medical, dental and vision) insurance programs and remits an invoice to the College for these costs. For the fiscal years ended August 31, 2018 and August 31, 2019, the College was overbilled for health insurance by a total of $4.6 million. We found that 16 of the 20 health insurance buyouts paid were inaccurate. College officials received the buyout amount from the County with no supporting calculations and made the payments based on those amounts. Using the premium rates provided, we determined that the College underpaid a total of $7,667 to 15 participants and overpaid $270 to one participant.

The Board did not develop a comprehensive cash collections policy to provide guidance for payments received at the Recreation Department (Department). The Department did not receipt and remit money in a timely manner. For remittances made in May 2018 and May 2019, the Department generated receipts up to 21 days after registration and remitted money up to 24 days after collection. All employees working at the Department can accept payments. However, employees are not provided with separate cash drawers. Therefore, all money collected is commingled in the same envelope until deposited.

We found that the Board did not approve 18 contracts with cumulative payments totaling $1.3 million, as required by the School’s policy. In addition, School officials made 26 purchases totaling $289,500 without using quotes, as recommended by the School’s policy. The School’s procurement policy is not comprehensive. o While the policy indicates that the Board will approve all contracts for purchases over $20,000, it does not specify how those written quotes will be obtained (e.g., advertising) or that the Board will review the quotes obtained for those contracts to form its approval. o The Board generally relies on the Director to seek quotes, select the vendor and provide the subsequent contract to the Board for its review and approval. o While the policy recommends that officials obtain three quotes for purchases between $5,000 and $20,000, it does not indicate whether these should be written or verbal. o The policy does not specifically describe the Board’s role and process for handling contracts awarded because of emergency situations.

The Town Clerk (Clerk) did not record, deposit, disburse and report all moneys collected in a timely and accurate manner, and the Board did not provide adequate oversight of her activities. We identified an accumulated cash shortage of $4,971 as of February 28, 2015. The Clerk also did not complete monthly bank reconciliations for her two accounts, or accountabilities to compare cash on hand with outstanding liabilities. The Clerk's mishandling of funds caused her bank account to have a negative balance that prevented the proper remittance of money to the Supervisor and State agencies. Additionally, the Clerk's monthly reports understated actual collections by at least $1,746 over the 14-month audit period. Upon finding a variance between the Clerk's cash on hand and her outstanding liabilities, we referred our audit findings to the OSC Division of Investigations, whose investigation subsequently uncovered $27,000 in missing penalty fees from tax collection money. On June 5, 2018 the Clerk was arrested and charged with misappropriating more than $35,000. On September 24, 2019 she pleaded guilty to fourth degree grand larceny. The clerk was sentenced on October 23, 2019 to pay full restitution in the amount of $36,122 and 250 hours of community service, and she is not to seek public office.

The District's budgeting practices made it appear that the District needed to both increase real property taxes and use appropriated and reserve funds to close projected budget gaps. However, the District realized operating surpluses and, consequently, fund balance was not needed to finance operations during the past three years and is expected not to be needed in 2019-20. The Board appropriated approximately $929,100 in fund balance from 2016-17 through 2018-19 and did not use any of that amount to fund operations because of generated operating surpluses. As of June 30, 2019, surplus fund balance totaled approximately $972,000, exceeding the statutory limit by approximately $535,000 or 5 percentage points. When unused appropriated fund balance was added back to the surplus fund balance, it totaled over $1.1 million, exceeding the statutory limit by approximately $680,500 or 6 percentage points.

Town officials complied with competitive bidding requirements for 15 of 18 tested purchase and public works contracts totaling $10.6 million. Town officials obtained professional services from 11 service providers who were paid a total of approximately $1.7 million. Town officials sought competition when selecting a provider of engineering and architectural services for construction of the Town highway garage (paid a total of $622,182 during the audit period). However, they did not competitively bid contracts for paving services and brush collection totaling $471,700. In addition, officials did not seek competition for 10 professional services totaling $1.1 million. Finally, officials did not obtain quotes as required by the procurement policy for eight purchases totaling about $115,000.

District officials need to improve internal controls over Future Farmers of America (FFA) cash receipts and disbursements. We found District officials did not perform an annual audit of FFA records during our audit period. We also found that collections did not include adequate supporting documentation for 41 deposits totaling $264,624. Furthermore, there was no supporting documentation for 15 out of 78 check disbursements tested totaling $5,871. Finally, FFA advisors used debit cards to make purchases totaling $74,893 without the required prior approvals.