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.

Duties in the Civil Division office have not been adequately segregated. Additionally, although the mechanical signature devices are controlled by the supervisor and locked in the Division safe, the supervisor's signature is automatically printed on the checks without any required prior authorization. Further, the manual's guidance regarding check signatures is out-of-date and does not reflect the current Division practices. Because of these control weaknesses, we compared the information entered into the recordkeeping system with the original court documents provided to the Division during May 2018. Of the 45 income executions recorded that month, we found that proper supporting documentation was maintained for all the cases. In addition, the recorded judgment amounts matched the court documents for all the cases and the fees and mileage retained were correctly calculated. We also found that all 963 recorded cash receipts totaling $699,653 for the month agreed with the amounts deposited and the deposit compositions matched the recorded cash receipts. In general, deposits were made in a timely manner based on the number of days between the check date and the deposit dates. Furthermore, we reviewed all disbursements made during June 2018 and found that all outgoing payments agreed with incoming cash receipts and all were for appropriate purposes.

Of the 224 granted exemptions that we reviewed totaling approximately $6.2 million of assessed value, 136 exemptions (61 percent), valued at approximately $3.8 million in assessed value, lacked one or more pieces of supporting documentation to verify their eligibility and/or were incorrectly granted. One property owner did not meet the eligibility requirements to receive agricultural building exemptions. As a result, the property owner incorrectly received $15,231 in tax reductions. In addition, agricultural building exemptions that were granted for the construction of two buildings were not supported. As a result, the property owner may have incorrectly received $80,126 in tax reductions. Finally, the Assessor did not have any documentation on file for four properties receiving eligible funds exemptions or four additional properties receiving senior citizens exemptions. As a result, the owners may have incorrectly received $2,551 in tax reductions.

The Yonkers Public School District's budget request is $645.3 million for appropriations, which has a budget gap of at least $17.6 million for pending additional State funding that is not supported. The District has appropriated $7.8 million of projected unassigned fund balance at the end of the 2018-19 year; however, this appropriation must be approved by the Board of Education and City Council before it can be used. If the fund balance is not approved or available at year end, the District could have a $7.8 million budget gap. The District's budget request includes a $4.2 million appropriation for the purchase of textbooks, software and equipment. However, the City's capital budget also includes up to $4.6 million for this acquisition. These are recurring District expenditures and should be included as an appropriation in the annual budget. The City continues to rely on nonrecurring revenue, such as specialized State aid and fund balance, to balance its budget. Revenue estimates for metered water sales, sewer rents and income tax surcharge may not be achievable. The City will incur additional debt and interest costs by bonding the cost of tax certiorari claims instead of financing them through the operating budget. The appropriations for police overtime and bond anticipation note (BAN) and revenue anticipation note (RAN) interest could be underestimated. Under the proposed budget, the City will have exhausted 89.3 percent of its constitutional tax limit. We caution the City that if property values do not increase, its ability to increase taxes may be reduced in future years. The water fund may be subsidizing the general fund for services not related to the water fund by as much as $3.7 million.

The Board and Village officials did not establish adequate internal controls over Department cash receipts. The Board did not adopt written cash receipt policies, cash receipt duties were not properly segregated and the Supervisor did not adequately oversee the cash receipt function. As a result, the attendant had almost complete control over the cash receipts without adequate oversight. From August 1, 2011 through November 30, 2017, we reviewed approximately 2,000 receipts issued by Department employees for cash collections totaling approximately $264,000. We estimate that additional unreceipted cash of $14,000 was collected for swim gate fees during this period. However, the attendant reported cash collections of approximately $107,700, a cash shortage of more than $170,000. During this period, less than half the amount of cash receipted by employees was remitted to the Treasurer. OSC's Division of Investigations in conjunction with the Erie County District Attorney's Office jointly investigated this matter. In October 2018, the attendant admitted stealing more than $150,000 from the Village and altering public records from 2011 through 2017. She pleaded guilty to grand larceny, false filing and official misconduct in October 2018 and was sentenced in March 2019. As part of her sentence, she repaid the Village $156,374.

The proposed budget includes appropriations of $85.7 million and revenue estimates of $40.7 million. For the fiscal year ended June 30, 2018, personal services and employee benefits accounted for 90 percent of revenue. This leaves little to finance operations and maintain infrastructure; yet the City continues to incur debt to finance recurring costs. The proposed budget includes revenue estimates of $4.5 million in metered water sales and $5.5 million in sewer rents. However, the City Council has not yet authorized the budgeted increases in rates that are needed to realize these revenues. The proposed budget includes appropriations of $1.9 million in termination salary payments, yet expenditures have averaged $2.2 million over the last three years. City officials only partially implemented the Comptroller's recommendations in our May 2018 review of the 2018-19 proposed budget. They did not modify the proposed budget to reflect a budgeted increase in refuse and garbage rates until June 2018.The City Council authorized $2.2 million in debt to cover termination salary related expenditures, planned to be issued prior to the end of the 2018-19 fiscal year. Continued reliance on debt to finance operations perpetuates the City's weak financial condition. The City's initially proposed budget includes a tax levy of $45,092,654 which is $3,218,797 above the limit established by law. On May 7, 2019, the Council adopted a resolution authorizing the City to override the tax levy limit.

The Board reviewed and approved purchases before they occurred and adequately segregated duties by hiring a third-party bookkeeper to reconcile all Department bank accounts monthly. Although Department officials told us they actively seek the best price for goods and services, they did not maintain sufficient documentation to support their statements. Also, the Board did not adopt policies and procedures to govern procurement. We reviewed all 215 purchases totaling approximately $155,500 during the audit period and found that only one of seven purchases exceeding $5,000, for $5,775 for an industrial washing machine, had documentation of competition being sought. Finally, the Board did not adopt a code of ethics to set forth standards of conduct, and certain officers did not disclose in writing their apparent “interest” in certain contracts the Department entered into, as required.

The Department needs to improve its cash receipt and disbursement procedures. The Board President (President) did not publicly disclose, in writing, his deemed interest in the oral agreement between his business and the Department. Based on the oral agreement, it appears that the President's business owed the Department at least $3,500. In addition, Department officials did not ensure collections totaling $75,200 from fundraising activities were adequately supported. Finally, the Treasurer did not keep adequate documentation for 55 disbursements totaling $38,500.

The Board did not audit individual claims before payment. However, our review of 59 claims totaling $1.2 million paid during the audit period showed that these claims generally appeared to be valid expenditures. Village officials were unable to provide documentation to show that they obtained the required number of bids, quotes or request for proposals (RFPs) for seven purchases totaling $102,494, as required by the procurement policy. In addition, while New York State Village Law authorizes certain claims to be paid in advance of audit, 14 claims totaling $380,938 were paid before audit that were not authorized for such prepayment. Finally, Village officials paid 40 credit card charges totaling $7,187 (of 103 charges totaling $16,999 incurred during the audit period) that were inadequately supported. Credit card purchases included nine charges for office supplies totaling $1,010 that were not adequately supported. Additionally, officials paid sales tax totaling $296 on the credit card purchases.

The former Clerk did not deposit Clerk fees intact. While total collections recorded in the system for each deposit generally agreed with the total amount deposited, we identified seven instances when the composition of total cash and checks recorded in the system did not agree with the composition of total cash and checks deposited. We identified a total cash shortage of $164 as a result of seven unrecorded checks substituted for recorded cash collections. In addition, the former Clerk did not adequately support collections and the form of payment was not always recorded. Although a receipt was sometimes printed from the system at the time of the transaction and maintained, this receipt was inadequate because the form of payment was not indicated and the number assigned by the system was not documented. For the 2016 and 2017 tax years, we reviewed 301 real property tax bills totaling $514,491 deposited by the former Clerk and found that collections for 76 bills totaling $115,725 (25 percent) were deposited between two and five days after receipt instead of within 24 hours as required by Town Law. In 2018, the current Clerk deposited collections for all 30 tax bills reviewed totaling $50,459 within 24 hours as required. Finally, receipts for the 2016 and 2017 real property tax collections and documentation to substantiate the date real property taxes were received could not be located.