While School officials adopted adequate credit card purchasing procedures, these procedures were not always followed. We reviewed all 316 credit card transactions totaling $37,183 during our audit period for the School's four credit cards. We found that 75 transactions totaling $11,575 had documentation to support the purchase that did not contain an explanation for the purpose of the purchase, eight transactions totaling $1,366 lacked itemized receipts and 16 transactions totaling $2,012 had no supporting documentation. For the 99 credit card transactions totaling $14,593 (40 percent) with inadequate support, we determined that 89 transactions totaling $14,327 were for appropriate purposes. However, we were unable to determine whether the remaining 10 transactions totaling $265 were for appropriate purposes because appropriate supporting documentation was not maintained.

The Program Coordinator (Coordinator), who deposited receipts for the 2018 Program, did not deposit all funds intact. The Coordinator held cash to pay vendors and reimburse staff who purchased incidentals for the Program. Officials did not require the use of press-numbered duplicate receipts for cash collections and perform an independent reconciliation of field trip collections to the amounts deposited. Furthermore, records were missing, which prevented us from determining whether the daily attendance and collection worksheets supported the collection totals listed on the daily cash envelopes. We also found that payments made to a movie theater totaling $4,730 were not documented. These payments were made in cash and no receipts were provided at the time of service. Officials did not ensure that money received for the Program was properly recorded, reported and disbursed. In addition, officials provided no oversight or monitoring of Program activities and the Coordinator did not submit any financial reports to the Board other than attendance counts.

The Town did not have a written agreement or basis for rates charged to the Department of Corrections and Community Supervision (DOCCS) for sewer services and it charged sewer district (District) users more than was necessary. District users, including outside users, paid $2.1 million more than the total expenditures. Charges to DOCCS alone exceeded expenditures by $1.4 million. In addition, the District had an excessive fund balance of $4.4 million as of December 31, 2017 or a balance in excess of 844 percent of the District's average annual expenditures.

District officials did not have documentation that they were only paying for transportation for students that lived in the District. We requested documentation for 300 students. The documentation for 93 of these students was missing and we found deficiencies such as no proof of address for 54 of the 193 new student's applications and no proof of birthdate for 15 students. For 2017-18, the District paid 15 schools to use private contractors on a per-student basis to transport 717 (or $495,499) more students than were registered. For 2018-19, as of April 1, 2019, the District is paying 23 schools to transport 455 (or $337,085) more students than registered. When student records are not accurate and consistent from report to report, there is an increased risk that the District will pay for students who are not eligible or do not existent.

Officials maintained the District's operating funds at one financial institution. During the audit period, operating funds were deposited in three interest-bearing checking accounts with a monthly interest rate of .1 percent. The average amount of available funds for investment for the tax collection account was $957,676 and the operating account was $435,461. The District realized interest earnings related to its operating funds of $3,072 during the audit period. We found that officials could have invested available operating funds averaging approximately $1.4 million in another financial institution with available interest rates between .80 percent and 2.31 percent or an average interest rate of 1.7 percent during the audit period. If officials had invested available funds in this financial institution, interest earnings could have been increased by $45,330 for the audit period.

Payroll calculation errors cost the District $3,638 and errors totaling $9,100 occurred with manual leave accrual entries. In addition, five employees had 21 time sheets lacking proper approvals and two employees had eight time sheets that were missing. Furthermore, the former payroll supervisor worked overtime hours that were not supported. Also, she did not record taking a lunch break on 297 of 315 days, resulting in overtime or extra pay. Finally, we found that errors occurred in the leave records maintained for 13 of the 26 (50 percent) employees tested.

The Board did not always adopt reasonable budget estimates. The Board overestimated expenditures by $8 million (8 percent) in 2016-17, resulting in an operating surplus of more than $6.2 million. Because District officials did not use historical trends to develop the budgets and instead relied on budget transfers, District officials made excessive adjustments to the budget, especially in the last five years when the budgets were adjusted on average of 12 percent. The District had unrestricted funds totaling $10.6 million and $12 million at the end of 2016-17 and 2017-18, respectively, which exceeded the statutory limits of $3.9 million and $4 million.

The City's proposed budget includes appropriations of $68,298,071. The proposed water fund budget includes $5.1 million in metered water sales revenue, which appears reasonable, pending Board approval of water rate increases. Budgeted overtime funding for police ($1.1 million) and firefighters ($800,000) is likely underestimated by a total of at least $910,000. The budgeted $565,000 in severance payments does not include appropriations for budgeted layoffs in 2019, and may not be sufficient if the layoffs do not take place until 2020. The budgeted $50,000 for unemployment insurance may be underestimated by up to $291,000, based on proposed layoffs. The proposed $581,000 in contingency appropriations may not cover unexpected expenses if these funds are used to pay underestimated police and overtime costs. Under the proposed 2020 budget, the City will exceed its Constitutional Tax Limit (CTL); however, City officials indicated they decreased the levy to be within the limit. The City faces potential increased salary costs when its collective bargaining agreement (CBA) with the International Association of Fire Fighters, which expired in 2017, is settled

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget are reasonable. The Town's 2020 tentative budget includes a proposed tax levy of $58,426,602.

The significant revenue and expenditure projections in the proposed budget are reasonable. The County's proposed budget includes a tax levy of $142,186,245.

District officials could improve their management of the District's financial condition. We found officials overestimated appropriations by a total of $7.1 million from 2015-16 through 2017-18, which resulted in most of the appropriated fund balance not being needed to fund operations. The tax certiorari reserve was overfunded by $963,200 (615 percent) as of June 30, 2018. In addition, encumbrances were overstated by a combined total of $264,000 from 2015-16 through 2017-18. Finally, although surplus fund balance was reported at or below the statutory limit from 2015-16 through 2017-18, recalculated surplus fund balance exceeded the statutory limit ranging from 7.2 percent to 10.9 percent.

Based on the results of our review, except for certain matters, we found that the significant revenue and expenditure projections in the proposed budget appear reasonable. The City did not appropriate any fund balance as a financing source in the 2020 general, water, sewer or refuse fund budgets. The City's draft audited financial statements reported that as of December 31, 2018, unrestricted fund balance in the general, water, sewer and refuse funds were approximately 20.2 percent, 46.5 percent, 26.6 percent, and 30.3 percent, respectively, of the following year's budgeted appropriations. City officials told us they are nearing a settlement on two tentative collective bargaining agreements (CBAs), therefore it is likely these CBAs will be in place in 2020 and the Common Council and City officials should budget accordingly. The Common Council also needs to consider whether the contingency appropriations are adequate if arbitration appeals are settled and unanticipated retirements occur. Finally, the proposed budget includes a tax levy of $13,044,260 which is the maximum levy that the City can impose without the Common Council needing to override the tax levy limit.

Significant revenue and expenditure projections in the proposed budget are reasonable. However, while the estimated revenues for the proposed refuse fund budget appear reasonable, they include $250,000 in estimated revenues for fees that the City has not previously assessed. Also, the minimal contingency appropriation in the proposed refuse fund budget provides the City with a limited amount of flexibility in the event of unforeseen circumstances that may require additional funds. The City's capital plan for the purchase of equipment and vehicles for the general and refuse funds remains unfunded through the proposed budget and instead will be financed by issuing debt. In addition, one of the City's collective bargaining agreements (CBA) is expired and the City faces potential significant increased salary and wage costs in the event that the CBA is settled in 2020. Finally, the City's proposed budget includes a tax levy of $26,304,399.

The District incurred operating deficits in two of the last three fiscal years, resulting in a $12.3 million (20 percent) decrease in total fund balance − from $60.3 million as of June 30, 2017 to $48 million as of June 30, 2019. This was due, in large part, to use of approximately $10.5 million in fund balance to retire debt in 2017-18. Approximately $36.5 million of fund balance was restricted in reserve funds as of June 30, 2019. However, approximately $8 million was unassigned fund balance. This is equivalent to 4.1 percent of the next year's budget, which is still slightly above the statutory limit. Despite incurring operating deficits, the District annually adopted budgets that overestimated expenditures by $1.8 million to $8.3 million and underestimated revenues by $1.8 million to $6 million. While unanticipated State aid generally accounted for revenue variances, employee benefits represented the largest portion of overestimated appropriations. Finally, the Board has not adopted a reserve fund policy or created a formal written plan to govern the funding and use of reserves. The Board generally reviews the District's reserves annually. However, we question the need for the insurance reserve totaling $371,333 as of June 30, 2019, as the District has insurance coverage for known risks.

The Board properly evaluated projects prior to approving financial benefits. However, the Board could improve its monitoring and verification of project performance related to job creation and capital investment. For example, although the payroll tax forms submitted by five of 27 companies did not support their employment reports, OCIDA officials did not request additional information to verify the employment information. In addition, OCIDA does not require companies to provide periodic progress reports or other documentation to evidence their actual capital investments. We also found that four companies received sales tax exemptions that exceeded approved amounts by a total of $173,446. Of this amount, officials properly recaptured $97,020 from one company.

The Board did not properly establish reserves or establish a reserve fund policy. In addition, the Board did not ensure that fire protection contracts were signed, that the services provided were billed for and that the costs of services were equitably allocated between service areas. The District provides fire protection services to the Town, funded by real property taxes, and to the Town of Roseboom and portions of the Town of Middlefield, funded by fire protection contractual agreements totaling $10,075 for 2018. As of March 31, 2019, the District had not received payments for 2017, 2018 or 2019 from the Town of Middlefield totaling $3,225 because District officials failed to bill the Town. Furthermore, the Board did not ensure the Annual Update Documents (AUDs), which are the Annual Financial Reports, are completed and submitted to our office. Finally, the Board did not annually audit the Treasurer's records.

The Board overestimated budgeted appropriations by an average of $2.6 million (7 percent) in each of the last five years (2013-14 through 2017-18) for a combined total of almost $12.6 million. As a result of the overestimated appropriations, the District experienced annual operating surpluses resulting in a five-year cumulative operating surplus exceeding $9 million, which resulted in excessive fund balance totaling approximately $6.5 million as of June 30, 2018. District officials maintained a surplus fund balance exceeding the statutory limit in each of the past five years (2013-14 through 2017-18). Surplus fund balance as a percentage of the next year's budget ranged between 17 and 23 percent and the statutory limit was exceeded by amounts ranging between $4.9 and $7 million. Our further review of surplus fund balance revealed that appropriated funds were not always used as budgeted. When unused appropriated fund balance is added back, surplus fund balance exceeded the allowable statutory limit each year by 13 to 21 percentage points.

Officials do not regularly review network user accounts and disable those that are determined to be unnecessary. In addition, the Board does not have an adequate contract and separate service level agreement for information technology (IT) services provided by the Broome Tioga Board of Cooperative Educational Services' South Central Regional Information Center (SRIC). Although SRIC provided a disaster recovery plan for the District, it is incomplete. The plan is clearly a template and lacks information. Finally, officials do not provide periodic IT security awareness training to staff.

As a result of our audit, we issued a report, dated October 2018, identifying certain conditions and opportunities for Village management's review and consideration. We revisited the Village in August 2019 to review progress in implementing our recommendations. Our follow-up review was confined to interviews with Village personnel and inspection of certain documents related to the issues identified in our report. Based on our limited procedures, it appears that the Village has made modest progress implementing corrective action. Of the 13 audit recommendations, two recommendations were implemented, seven recommendations were partially implemented and four recommendations were not implemented.

The Board did not establish policies to provide reasonable assurance that fuel was used for its intended purpose and properly accounted for. In addition, District officials did not design procedures to ensure fuel use and inventory records were properly maintained and reconciled. As a result, the responsibility for managing transportation fuel inventories was not clearly assigned and District officials did not maintain complete and accurate inventory records to safeguard and account for fuel inventories. We found that complete fuel inventory, delivery and usage records are not maintained and reconciliations are not performed. In addition, we found that 17 of 78 keys (22 percent) that allowed access to the fuel meter could not be located.