Employee timekeeping records were inconsistent and leave used was not always deducted from the leave accrual records. Our tests of 69 employees found 12 days, valued at $3,700, which were not deducted from employees' leave accruals. In addition, District officials did not always ensure employees submitted a leave request form or ensure the legitimacy of leave taken. The District may have paid as much as $14,200 for the cost of substitute employees for unsupported and potentially inappropriate leave taken. Finally, leave earned by employees was not always in accordance with collective bargaining agreements. Errors occurred because no one oversees the personnel clerk's input of the employees' contractual leave accrual benefits into the system.

The Board-adopted policy did not provide guidelines on how to enforce the collection of outstanding parking tickets. In addition, the Court's methods of enforcing the collection of unpaid parking tickets by issuing delinquency notices and impounding vehicles were not operating effectively and the Court did not participate in any other alternative enforcement practices. During our audit period, the Court disposed 400 of 847 issued parking tickets, resulting in a parking ticket collection rate of 47 percent. The Village had 6,776 unpaid parking tickets totaling $354,705 as of July 31, 2018. In addition, the Clerk used her discretion to forgive late fees totaling $5,110 on 184 (or 78 percent) parking tickets. Finally, the Court's bail liability was $36,425, or $6,924 less than the $43,349 recorded in the system as of July 31, 2018.

School districts are required to pay tuition for resident students attending charter schools or receiving special education services from other public or private schools. We recalculated tuition costs and full-time equivalents (FTEs) using attendance records for charter school students and special education students' individualized education programs (IEPs) to verify that the District was billed for the correct services and frequency. We found that tuition was incorrectly calculated for nine students. The District was overbilled $5,300 for eight charter school students. The billing school used the correct rate for those students but used the incorrect FTE to calculate the tuition, resulting in overbilling. Additionally, the District was underbilled by a private school $900 for one special education student. The billing school used the incorrect rate when calculating tuition. We also found that the District did not have adequate and up-to-date residency information to support tuition charges totaling $2.5 million for 162 students (77 percent) attending charter schools and other public or private schools. The District had no registration or residency information on file for 44 of these students and registration information that was out-of-date and/or incomplete for the remaining 118 students.

We found that the Board overestimated expenditures by $17.7 million in 2015-16, resulting in an operating surplus of more than $18.8 million. The Board appropriated $4 million in fund balance in 2015-16, but did not use it to finance operations. In addition, from 2013-14 through 2015-16, the Board accumulated excess reserves, which annually averaged approximately $5.5 million. When unused appropriated fund balance and excess reserves are added back, the District's recalculated unrestricted fund balance exceeded the statutory limit in each of the three years. In addition, District officials did not always use reserves as intended. Often related reserve costs were paid through the general fund, while at other times reserve funds were used for unexplained purposes. Reserves were overfunded by $7.3 million as of June 30, 2016. We also found that the Information Technology Director did not adequately monitor the electronic devices inventory resulting in items not being recorded.

We examined 36 claims totaling $19,358 to determine whether the Board audited claims before they were paid. While all 36 claims paid appear to be for actual and necessary District expenditures, we found no evidence that the Board audited the claims before payment. The Board President stated that he received all claims weekly and that he alone reviewed each claims packet, on behalf of the Board, before signing any checks. However, after repeated requests, the former Business Manager/Treasurer informed us that he filed each claim component (i.e. purchase order, invoice, claims voucher) separately and not as a claims packet, and that he provided the Board with only the warrant and a stack of checks each month. Furthermore, we found, and the District Clerk confirmed, that no packing slips were retained as proof that goods were received. While the District Clerk generally signs each claim voucher to indicate that she reviewed the invoices and verified the proper quantity was received, the correct price was charged and that she had approved the invoices for payment, we found that she did not sign four of the 36 claims that we reviewed. Also, the former Business Manager/Treasurer did not have any requisitions for the 36 purchases. Finally, the Superintendent did not sign the claims vouchers for four of the 36 purchases, totaling $3,601, to authorize the payment.

We compared budgeted appropriations and estimated revenues with actual operating results for 2015-16 through 2017-18 and found that, while revenue variances were generally reasonable (underestimated by an annual average less than 2 percent), appropriations were overestimated by an average of $1.3 million (7 percent) each year or a total of almost $3.8 million. In addition, the Board annually appropriated $500,000 of fund balance that was not used to finance operations during our audit period. As of June 30, 2018, surplus fund balance totaled almost $1.5 million, 7 percent of the 2018-19 budgeted appropriations, exceeding the statutory limit by approximately $626,000. Furthermore, as of June 30, 2018, the debt service reserve had a reported balance of over $1.4 million. While certain funds are required by law to be set aside and used to pay related debt, District officials were unable to identify the specific capital improvements or debt issuances for approximately $528,000 of these funds. Finally, although the Board adopted a reserve fund plan, it did not include the financial objective, optimal funding levels and conditions for use for each reserve. We found that while the reserves were properly established, certain reserve balances were excessive and not being used.

The Board has not adopted a written reserve fund policy. Rather, the Board periodically reviews a reserve report, prepared by the Treasurer, which communicates the purpose, funding source, monitoring, use and year end balances of each reserve; however, this report does not include optimal or targeted funding levels for all of the reserves reported. As of June 30, 2018, the District reported four general fund reserves with balances totaling nearly $1.4 million. We analyzed the four reserves for reasonableness and found that the retirement contribution reserve is reasonably funded. However, the other three reserves, with balances totaling approximately $1.3 million are overfunded. In addition, the District's debt service fund maintained a balance of approximately $1 million over the past three fiscal years while no funds were used from this fund during this period. For the last three fiscal years, the District has included a $225,000 transfer in its adopted budgets from the debt service fund to the general fund, each year, to help pay for related debt service costs. However, the transfers were not made to help offset debt principal and interest payments made out of the general fund totaling $2.8 million over the audit period.

We compared budgeted appropriations and estimated revenues with actual operating results for 2015-16 through 2017-18 and found that, while revenue variances were generally reasonable, appropriations were overestimated by an annual average of approximately $1 million (7 percent) each year or a total of $3.2 million. Because the Board and District officials overestimated appropriations, it appeared the District needed to appropriate fund balance to close projected budget deficits in two fiscal years of our audit period. This practice did not continue in the 2018-19 budget. When fund balance is appropriated for the next year's budget, the expectation is that there will be a planned operating deficit equal to the amount of fund balance that was appropriated. However, primarily due to overestimated appropriations, the District experienced annual operating surpluses resulting in a three-year cumulative operating surplus totaling almost $2.2 million. As a result, surplus fund balance increased to more than $2.4 million as of June 30, 2018, and was 15 percent of the 2018-19 budgeted appropriations, exceeding the statutory limit by $1.8 million or 11 percentage points. While the District realized operating surpluses and retained excessive fund balance each year, the Board levied real property taxes averaging $3.3 million annually from 2015-16 through 2018-19. Although the tax levy net increase was $50,000 during that time period, had officials adopted more reasonable budgets, they could have considered using these excess funds to fund one-time expenditures, fund needed reserves, pay off debt or reduce the levy and provide an even greater benefit to taxpayers.

We found that the School overbilled the Syracuse City School District $28,640 in charter school tuition for the 2017-18 school year and it under-billed four other resident districts a total of $27,389. The School does not have a good process in place to identify changes in residency, and we found inconsistencies in student addresses used for billing purposes. The School also did not have all the necessary student residence documentation on file. Because the School does not have an adequate process in place to ensure that student addresses used for billing resident districts are supported by, and in agreement with, documentation showing residency, there is an increased risk for inaccuracies in tuition billing.

The Board did not develop or adopt comprehensive, multiyear financial and capital plans. Such plans would be useful tools to outline the Board's intentions for financing future capital improvements and maintaining the existing infrastructure. The Board lacked certain information necessary to adequately adopt these plans. For example, Town officials we spoke to were unaware that the highway superintendent was required to annually submit a written inventory list of all machinery, tools, implements and equipment, including an estimate of any needed repairs and recommendations for highway infrastructure improvements along with the estimated costs. As a result, the Board was unable to sufficiently plan for long-term road maintenance and replacement of highway equipment costs. While the Board has no formal multiyear plan in place, it has implemented some components of multiyear planning. However, the Board did not establish a fund balance policy or formal reserve plan detailing the level of fund balance and specific reserves it deemed necessary, including funding levels, and a plan for the periodic review of these reserves. As of December 31, 2018, reserves totaled $1.29 million, or approximately 27 percent of total appropriations.

The Board needs to improve its monitoring of the Town's financial operations and take timely action to maintain the Town's financial stability. The Board did not adopt structurally balanced budgets and did not monitor the budgets throughout the year. As a result, the Town accumulated excessive fund balances in its general funds of about $1 million and deficit fund balances in its highway funds of over $1.1 million at the end of 2017. When combined together, the general and highway town-wide funds ended 2017 with a deficit fund balance of about $166,000. The Board did not fully understand the impact of appropriating fund balance each year. As a result, it did not adopt structurally balanced budgets that provided for sufficient recurring revenues to finance recurring expenditures. Furthermore, the Board did not adequately monitor the budget. Because officials did not maintain sufficient levels of fund balance in the highway funds to support current operations, the Town relied on interfund loans and short-term borrowings during our audit period. Finally, the Supervisor did not provide the Board with accurate financial reports for managing financial condition.

The Board and Town officials have not developed, adopted and implemented a disaster recovery plan or formal backup procedures. In addition, the Board has not developed, adopted and implemented a breach notification policy or local law because it was not aware of this requirement. Furthermore, employees were not provided with IT security awareness training to ensure they understand the policies and how they could help protect IT assets and computerized data. Finally, The IT Consultant or Town officials did not maintain an up-to-date inventory of hardware or software.

The Board assigned the water clerk (clerk) responsibility for maintaining complete records for the District. The clerk maintains customer contact information, billing and payments in the computerized financial system. In addition, she maintains spreadsheets for winter and summer billings, payments and deposit compositions for each deposit made. The Board did not adopt adequate policies and procedures or implement compensating controls, such as providing oversight of the clerk's incompatible duties. The nature of duties assigned to the clerk created substantial weaknesses in internal controls and no evidence was presented to us to indicate that the Board reviewed her work to reduce the effect of those weaknesses. Town officials did not have maps that show all the properties located within District boundaries as required. We found that there were 128 residential property owners within the District who were not billed for water use during 2017. As a result, the Town is likely losing water fee revenue ranging from $23,040 to $41,600 and provided service to residents that are not being billed. Finally, the Town Code, which requires that officials assess a 20 percent penalty for nonpayment or delinquent water accounts, does not comply with Town Law because the penalty exceeds 10 percent of the total amount due. This occurred because officials were unaware of the maximum percentage to be charged on unpaid water rents allowed by law. As a result, officials overcharged 96 customers $2,787 in 2017.

We reviewed all fines and fees collected by the two Justices totaling more than $19,000 from January 1, 2018 through October 22, 2018. We found that fines and fees were generally recorded accurately and deposited timely and intact (in the same amount and form – cash or check – as received). Additionally, all fees received by the Court were remitted and reported in a timely manner. The Justices submitted monthly reports to JCF and remitted all fines and fees to the appropriate parties. However, the Justices did not always prepare monthly bank reconciliations and accountabilities to ensure that all collections were accurately accounted for and that discrepancies were promptly identified and corrected.

School officials have maintained adequate proof of residency records, accurately billed resident districts using the correct New York State Education Department rate and full-time equivalent and ensured that year-end reconciliations were reasonable and supported. There were no recommendations as a result of this audit.

We reviewed the County Clerk's, Surrogate's Court's and Commissioner's processes, procedures and records for the receipt and management of court and trust funds as well as estates in the Commissioner's custody. We found that the records maintained by the County Clerk and Surrogate's Court were generally up-to-date and complete, and we noted no material discrepancies.

The Town Clerk did not record or remit tax payments in a timely manner. We reviewed 13 deposits consisting of 356 tax payments recorded during February 2018 totaling $520,000. We found that tax collections were recorded properly and deposited intact but were not always recorded and remitted in a timely manner. We also reviewed all fees collected from January 1, 2018 through October 22, 2018 totaling approximately $6,000 and found that Clerk fees were recorded accurately, properly reported and remitted, but collections totaling more than $5,900 were not deposited in a timely manner.

Over the last two years, lunch operations have incurred operating deficits totaling $150,000. Officials were aware that the lunch operation was not self-supporting. However, because they did not include staff salaries and rent for kitchen space in the costs, they did not realize the extent that other school revenues were being used to support the program. While the operations manager calculates the cost of producing meals annually for menu planning, no one has performed a cost-per-meal equivalent (ME) or meals-per-labor-hour (MPLH) analyses to help identify potential inefficiencies. We performed an MPLH analysis and found that the lunch operations performed efficiently compared to industry standards. However, the total revenue-per-ME decreased by 6 percent after staff began receiving free lunches. We project that revenues-per-ME will increase by 1 percent for 2018-19 due to budgeted aid increases. Additionally, the cost to produce a meal exceeded revenues per meal for each of the last two years. Furthermore, officials could have saved money if they purchased from the New York State Office of General Services cooperative bid.

While two Board members created a highway equipment inventory list, the Superintendent and the Board have not ensured it was updated regularly, was accurate and complete or submitted to the entire Board annually. The inventory list provided to us was created March 17, 2015 and was modified the same day it was presented to us. We were told by a Board Member that the inventory list has not been presented to the Board as a whole since its creation. We selected 39 pieces of equipment that were part of the list to determine if they were in the Town's possession and determined that 38 pieces were in the Town's possession. In addition, because Town officials did not perform periodic fuel inventory reconciliations, there is an increased risk that fuel could be lost, wasted or misused. Finally, although we found the purchases we tested to be legitimate Town expenditures, when the Board does not update its policies, including requirements for maintaining quotes or bids, it cannot be certain that goods and services are procured in the most economical way and in the best interest of taxpayers.

Town officials did not reasonably budget for certain general fund revenues and appropriations. Total revenues were underestimated by an annual average of $906,000, and expenditures were overestimated by an average of $1.3 million. These revenues and expenditures were not reasonably estimated because the Board compared the current adopted budget to the ensuing year's preliminary budget rather than comparing the preliminary budget to the actual result of operations. Furthermore, Town officials did not request budget estimates from Town department heads during the annual budget process to determine reasonable budget amounts. The Town's budgeting practices resulted in an increase in fund balance from $8.6 million in 2013 to $20.9 million 2017. Fund balance is projected to increase to $22.8 million at the end of 2018. The Board also appropriated fund balance ranging from $1.2 million to $1.4 million that was not used to finance appropriation during the fiscal years 2013 through 2017. Finally, the Board did not establish a formal fund balance policy.