We reviewed 57 purchases subject to competitive bidding requirements (totaling $5.63 million), and found three purchases (totaling $126,477) that were not competitively bid. Further, an additional three purchases reviewed (totaling $708,093) were related to water storage tank improvements and maintenance on two different towers within the Town. We were told that the Town procured these as a professional service because the procurement required a “specialized skill set.” However, Town officials were unable to provide us with any documentation or analysis indicating how they arrived at the determination that the procurements qualified as a professional service exception. We also reviewed payments to 35 vendors whose payments, if aggregated, would have exceeded the competitive bidding dollar thresholds set forth in the General Municipal Law. The Town made payments to three vendors (totaling $295,938) without soliciting bids. Finally, Town officials did not seek competition for eight professional service contracts totaling $384,400.

The Board has not appointed a claims auditor to audit claims before payment as required by the School's cash disbursement policy. Cash disbursements were not properly approved prior to payment, supported or accounted for in a timely manner. While we found that all disbursements were for a legitimate School purpose, 83 disbursements (78 percent) totaling $69,464 (69 percent) had no acknowledgement that goods or services were received in good condition. In addition, officials did not adequately segregate cash disbursement duties and debit cards are being used for cash disbursements. The bookkeeper does not record check disbursements in the accounting system until they are posted to the bank checking account. This practice causes some disbursements to be posted in a different month than they were made, resulting in an overstatement of cash balances and an understatement of expenses in the monthly reports to the Board.

The Lake Champlain–Lake George Regional Planning Board did not monitor its loan program. While loan procedures were prepared by the former Director and submitted to the U.S. Department of Commerce for review and approval, the current Director could not provide any evidence that the Board reviewed and approved the policies and procedures. We reviewed the files for all 26 of the loans approved during our audit period, which totaled more than $2.3 million, and found that the Director did not maintain any summary or application checklist for any of the loan files to ensure all required documentation was submitted by the borrowers, prior to the submittal of the applications to the Committee. The Director and two Committee members told us that after the loan funds are disbursed, they do not follow-up with the borrowers on how the loan funds were used or whether any jobs were created. Delinquent loans were not properly enforced. Finally, the Board and Committee did not authorize the write off of uncollectable loans. During our audit period, two loans totaling $110,000 in principal, interest and late fees were written off. However, we found no documentation in the minutes of the Board or the Committee discussing or authorizing the write off of these loans.

The Board did not develop and manage a comprehensive investment program to ensure interest earnings were maximized and bank fees were minimized. Consequently, we found that the Supervisor invested the Town's operating funds during the audit period in six money market savings accounts that received monthly interest rates of either .01 percent or .02 percent. As a result, the Town realized interest earnings of only $920 during the audit period. We found that the Town could have invested available operating funds averaging approximately $2.6 million during the audit period in a financial institution with higher available interest rates of between .40 percent and 2.12 percent or an average interest rate of 1.17 percent during the audit period. If the Supervisor had invested these funds in this financial institution, interest earnings could have been increased by $56,324 during the audit period. Finally, the Town incurred bank fees totaling $3,327 while receiving $920 in interest earnings during the audit period resulting in a net cost of $2,407 related to banking services.

Student treasurers did not maintain adequate accounting records. Extra-classroom activity clubs did not always have adequate supporting documentation for collections, including 23 of 48 deposits totaling $45,518. However, with the exception of four World of Difference club donations totaling $1,000 and one Spanish club donation for $338, all disbursements had appropriate supporting documentation. The central treasurer properly accounted for the collections in the treasurer's ledger and provided duplicate receipts to the clubs for all of the remittances. We also found that the disbursements were properly approved, recorded and generally supported in the central treasurer's ledger.

The Board and District officials could not demonstrate whether Board-approved payments of approximately $169,000 were a proper use of District money. In addition, travel and car rental costs of approximately $58,000 were not pre-approved and the Board did not authorize per diem payments of approximately $9,000 that may have been unnecessary and/or an improper use of District money. Finally, the District could have saved up to $17,000 had the Board required the use of lodging that accepted General Services Administration rates.

We found the Board approved 236 purchases totaling $24,416 (19 percent) that lacked adequate supporting documentation or an explanation to support the purchase as an appropriate expenditure. Town officials and department heads were generally able to provide a reasonable explanation for these purchases. However, without adequate policies and procedures, officials were unable to determine whether all these purchases were appropriate. We also identified 45 purchases totaling $4,305 (4 percent) that were shipped directly to an employee's personal residence. Further, we found 160 credit card purchases totaling $12,938 that were personal purchases made by the former assistant recreation director. In August 2017, the former assistant director signed a letter of resignation and restitution agreement of $14,253, which included interest.

District officials did not adequately oversee the cash disbursement process. In our audit sample of disbursements, 30 claims (11 percent) totaling $73,865 were not approved by the department head and 15 claims (5 percent) totaling $69,670 were not approved by the claims auditor. In addition, officials did not establish procedures over payroll to segregate duties or implement adequate compensating controls. Although our testing did not reveal any discrepancies with payroll processing, we found that the senior account clerk's leave accrual records contained errors, and her sick leave balances exceeded the contractual maximum by 111 days.

District officials obtained parental consent to submit Medicaid claims for reimbursement of services provided to 36 eligible students during 2017-18 and 29 eligible students during 2018-19. We reviewed records for 10 eligible students for services provided in 2017-18 and 2018-19 and found claims were not submitted and reimbursed for all eligible services provided. Claims were not submitted and reimbursed for 273 of 1,613 (17 percent) eligible services totaling $16,910 that were recorded as being provided in the special education system (system). As a result, the District did not realize revenue totaling $8,455. The failure to submit claims and receive reimbursements for eligible services occurred because officials did not establish adequate procedures to ensure that all claim reimbursement documentation requirements were met and did not reconcile Medicaid eligible services provided to the claims submitted and reimbursed. After the District took over this process from the vendor, the Director implemented adequate procedures to ensure all claim reimbursement documentation was properly recorded by providers. However, the Director did not reconcile the Medicaid eligible services provided to the claims submitted and reimbursed to ensure that claims were submitted and paid for all eligible services provided.

School officials did not establish effective procedures that ensured credit card claims were properly supported and credit cards used appropriately. The School authorized the Operations Director, Executive Director, the two Business Managers and the Academic Director to use school credit cards. School officials made credit card purchases totaling $496,970 during the audit period. We reviewed 641 credit card transactions totaling $216,882, of which 119 transactions totaling $36,329 (17 percent) were approved for payment without receipts to support the charge. Another 39 transactions totaling $25,342 (12 percent) had receipts that were not itemized. The Board also approved 27 meal purchases, totaling $5,790, for payment without adequate supporting documentation.

Financial activity for the community education program was not recorded in the general fund as required, but instead was accounted for in the special aid fund. The accountant established sub-funds within the special aid fund to record the community education and literacy program's financial activities separately. In addition, both revenues and expenditures were incorrectly accounted for within these two sub-funds. For example, certain literacy program revenue was improperly recorded as community education revenue. In addition, fringe benefit costs were disproportionately charged to the community education program expenditure account instead of the literacy program, totaling $728,000. Finally, officials did not always properly record literacy program revenue in the correct fiscal year.

The Board overestimated appropriations by a total of $2.3 million from 2015-16 through 2017-18 and annually appropriated an average of $495,000 of fund balance that was not used to finance operations. As of June 30, 2018, surplus fund balance totaled $1.7 million and was 12 percent of 2018-19 appropriations, exceeding the statutory limit by approximately $1.2 million or 8 percentage points. Annually appropriating fund balance that is not needed to finance operations is, in effect, a reservation of fund balance not provided for by statute and a circumvention of the statutory limit imposed on the surplus fund balance level. When unused appropriated fund balance is added back, surplus fund balance exceeded the limit each year by 10 to 11 percentage points. Finally, the Board has not adopted a comprehensive written fund balance policy.

The Treasurer did not maintain separate records on leave accruals earned and used for administrative employees or the amount of sick leave accrued and to be carried over to the next fiscal year. We found that three employees used more vacation leave, totaling 32 hours at a cost of $1,223, than they were allocated for the year. In addition, all employees earned and used compensatory time; however, compensatory time is not covered in the handbook or in the Board meeting minutes. Finally, the amounts paid by four surviving spouses for their 2018 health insurance premiums were inaccurate. Two of them had balances outstanding totaling $1,084 because they did not pay the amount billed, and the Treasurer did not catch the errors because she did not reconcile their payments to the billings. Two surviving spouses had overpaid the amount due for the year by $553. However, the Village did not reimburse them for the overpayment nor apply it to the following year.

District officials did not establish a written policy or procedures to ensure that all overtime hours worked were preapproved, adequately recorded and incurred only when necessary. Existing controls over the payroll overtime process did not require preapproval. District officials did not preapprove and adequately monitor overtime for custodial employees. As a result, the District paid overtime to 10 custodial employees totaling $35,017 or 43 percent of total overtime paid to these employees, primarily for non-emergencies. However, with appropriate scheduling some of these overtime payments could have been avoided or reduced. Furthermore, the District also paid $29,135 in overtime to employees who substituted for other employees absent on their scheduled workdays. More than 40 percent of these absences were preapproved and with appropriate scheduling these overtime payments could have been avoided or reduced.

District officials properly established the capital project budget for the eight school buildings and transportation facility improvement project. Officials also monitored and accounted for the capital project, and ensured that work completed was within the scope of the project. We reviewed the project budget and all 136 project claims totaling approximately $4.9 million and all 56 project change orders totaling $315,366 for the audit period and found that District officials properly established, monitored and accounted for the capital project. There were no recommendations as a result of this audit.

The Board does not audit claims prior to approving them for payment. Board members told us that they occasionally review some of the claims but were not aware that they were required to review each claim prior to approving them for payment. As a result, the Treasurer made duplicate payments to 11 vendors totaling more than $17,000, including approximately $3,200 that District officials did not find prior to our audit. In addition, District officials did not competitively bid a public works contract totaling more than $115,000 and did not obtain quotes for 16 of 21 purchases totaling $56,036. In addition, from June 2014 through October 2016, the Board was regularly updated on the project's progress by the construction manager. However, after October 2016, there were no minutes provided. Therefore, it is unclear whether the construction manager continued to regularly update the Board during 2017, when much of the construction was underway. Finally, the construction manager may have improperly charged the District $14,245 for administrative fees and sales tax.

Town officials have not developed adequate IT policies or adopted a written disaster recovery plan. We also found that officials did not monitor Internet usage for computer use policy compliance. Town computers were used for personal activities. Officials did not review the inventory of IT hardware and do not maintain an inventory of software or data. Finally, Town employees were not provided with IT security awareness training.

We reviewed 91 claims totaling $1.3 million (7 percent) paid during the audit period and found they were generally supported by adequate documentation and for proper purposes. However, 45 claims totaling $471,138 were paid before the claims auditor’s approval and the claims auditor did not audit 10 scholarship payments totaling $4,750.

District officials did not include the proper formula for the Public Excess Cost Aid (PECA) set-aside amount in the billing template they provided to charter schools. Instead, they used an outdated PECA formula to determine the set-aside for tuition billing rather than the PECA set-aside formula found in the 2017-18 and 2018-19 State Education Department State aid handbooks. We reviewed all 18 final reconciliations for 2017-18, totaling $118.3 million, and all 19 invoices for the fifth billing in 2018-19, totaling $127.8 million, to determine whether charter school tuition billing for PECA set-aside was accurate. At the time of our testing, the District initially overpaid in both school years. For the 18 invoices in 2017-18, the District paid $5.6 million in PECA set-aside; however, we calculated that the District should have paid $4.6 million, an overpayment of $1 million (18 percent). For the 19 invoices in 2018-19, the District paid $7.1 million in PECA set-aside; however, we calculated that the District should have paid $5.4 million, an overpayment of $1.7 million (24 percent). After discussing it with us, District officials took corrective action to avoid a potential $1.7 million overpayment in 2018-19. In addition, the Board and District officials did not adopt written policies or procedures for charter school tuition billing.

Village officials accurately billed users for water and sewer charges. Officials also deposited water and sewer collections intact and in a timely manner and enforced unpaid bills and correctly assigned interest and penalties. Overall, the Board and officials established effective controls over the billing, collection and enforcement of water and sewer charges.