The Board did not adopt a fund balance and reserve policy or create comprehensive multiyear financial and capital plans. From December 31, 2014 through December 31, 2017, general fund unrestricted fund balance increased by $106,230 (110 percent). Over the same three-year period, highway fund unrestricted fund balance increased by $50,007 (24 percent). The Supervisor told us that when he was elected, his intent was to build up fund balance to allow for the repair and purchase of equipment as needed and, going forward, his intentions are to direct a greater portion of real property taxes to the highway fund. Town officials have identified financial and capital needs. However, without an evaluation of financial needs, and the adoption of a fund balance and reserve policy and a multiyear financial plan, the Board increases the risk that money will not be available when expenditures become necessary or that more taxes than necessary will be levied when adequate financial resources are already available. Moreover, raising real property taxes while increasing fund balance, without formal plans, does not provide transparency to Town taxpayers.

The Assessor granted a total of 633 non-New York State School Tax Relief Program (STAR) property tax exemptions for non-municipal owned property on the 2017 assessment roll, collectively reducing the Town's 2018 taxable assessed value by more than $34 million. We found that the Assessor granted exemptions without applications, renewal forms or supporting documentation. The Assessor also granted an ineligible exemption and did not correctly calculate granted exemptions. We reviewed 108 exemptions totaling $19.6 million and identified issues with 66 exemptions totaling $10.6 million. Specifically, we found 64 granted exemptions (59 percent) totaling $10.3 million in Town-exempted assessed value lacked one or more pieces of supporting documentation to determine the eligibility or verify the accuracy of the exemption calculation. For the 44 exemptions with sufficient supporting documentation, we found two exemptions (5 percent) were incorrectly calculated. Both were agriculture exemptions totaling $239,558 in Town-exempted assessed value. These incorrect exemption calculations had a net exemption difference of $7,261, for property owners in fiscal year 2018. Finally, the Assessor did not report the transfer of property with exemptions to the County as required.

We found that controls over payroll and time records were adequate to ensure the accuracy of payroll and time records. While the Town has a good system in place, we believe it could be further improved by filing approved timesheets electronically instead of printing them out only to have paper copies on file in order to save the time and expense of printing. Electronic files could provide the same documentation and with appropriate backup procedures could be just as safe. Electronic files also provide added functionality since they can be searched in different ways such as by pay period or multiple pay periods for a given individual.

Assess whether local governments and school districts that utilize aggregators for energy purchases are ensuring they are procuring electricity and natural gas at the lowest prices.

Although claims were supported by adequate documentation and for appropriate purposes, they were not always audited and approved before payment. Signed checks were printed before the claims auditor audited and approved the corresponding claims. We found that claims totaling $27,888 for 15 check disbursements made during the audit period were not audited and approved before payment. In addition, the Treasurer reviewed the debit card transactions on the monthly bank statements and recorded them in the accounting records. However, because these transactions were direct charges to the bank account, the claims audit process was circumvented. Further, these transactions were not subsequently audited and approved by the claims auditor. During the audit period, 45 debit card transactions totaling $24,405 were not audited and approved.

The Town granted a total of 1,278 non-STAR property tax exemptions for non-municipal-owned property on the 2018 assessment roll, collectively reducing the Town's 2019 taxable assessed value by more than $92.7 million. We reviewed 125 exemptions totaling $52.1 million and identified issues with 21 exemptions totaling $848,961 (2 percent). We found 16 exemptions (13 percent) totaling $738,693 in Town-exempted assessed value lacked one or more pieces of supporting documentation to determine eligibility or verify the accuracy of the exemption calculation. We also found five of the 109 exemptions (5 percent) with sufficient supporting documentation (all agriculture exemptions) totaling $507,566 were incorrectly calculated. Furthermore, although the Assessor certified the assessment roll was accurate, including exemptions granted prior to her tenure, she did not review the exemptions granted by previous assessors to ensure they had supporting documentation, were correctly calculated and continued to be eligible. Additionally, the Assessor did not review the clerk's work. Finally, the Assessor did not notify the County when transferred property had exemptions.

We found exceptions with 14 of the 116 real property tax exemptions that we reviewed. These exemptions lacked adequate supporting documentation to verify their eligibility. The properties with exceptions had their total taxable assessed value reduced by about $3.6 million. Specifically, we reviewed 32 properties receiving an agricultural exemption and found three exemptions lacked one or more pieces of supporting documentation necessary to verify their eligibility for the exemption. We also reviewed 25 properties receiving a senior citizens exemption and found five (20 percent) lacked either one or more pieces of supporting documentation to verify the eligibility and accuracy of these exemptions, or was calculated incorrectly. Finally, we reviewed 59 properties receiving veteran exemptions and found six properties (10 percent) lacked one or more pieces of supporting documentation to verify the eligibility and accuracy of these exemptions.

District officials did not always solicit competition by issuing requests for proposals when procuring professional services as required by the Board's policy. We reviewed the claims paid to 10 professional service providers, who were paid a total of $422,677 during our audit period, and found discrepancies with eight providers paid a total of $309,300. For example, the District paid an investigator $7,813 more than the Board-approved rate of $45,000. We also examined invoices from 20 vendors totaling $48,965 in the 2016-17 fiscal year to determine whether District officials complied with the District's purchasing policy for obtaining quotes. We found that the District procured goods and services from 12 vendors totaling $23,678 without obtaining the required number of quotes.

The District lacked adequate procedures to ensure Medicaid claims were submitted and reimbursed for all eligible services provided. As a result, claims were not submitted and reimbursed for 1,674 eligible services totaling $58,965 and service providers did not document 1,593 scheduled services totaling $54,054 in the special education system as having been provided to students. Had these services been appropriately claimed and documented, the District could have realized potential revenues totaling $56,510. District officials did not submit any claims for reimbursement from 2011-12 through 2014-15 or submit claims for all eligible services provided from 2015-16 through 2017-18 due to inadequate procedures.

The Board received monthly financial reports provided by the Treasurer that it used to monitor financial operations. However, we identified deficiencies related to the Board's claims audit process and annual audit responsibilities that it should address to improve its oversight of financial operations. For example, we tested 75 of 480 disbursements made during our audit period, totaling $31,300, and found that 15 totaling $7,159 were not audited and approved by the Board. In addition, the District used debit cards to make purchases totaling approximately $14,000. The Board did not audit and approve the associated claims before payment. The Board did not contract for an independent audit of its 2017 records as required by law. Finally, certain Treasury duties were improperly assigned to a professional service provider and third-party vendors (vendors) had access to District bank accounts to withdraw electronic payments.

The Board did not appoint a faculty counselor, faculty auditor or a central treasurer as required by the Commissioner's Regulations. Although not formally appointed by the Board, the District Treasurer performed the central treasurer's duties for ECA funds. She was responsible for receiving funds from the faculty advisors, disbursing club funds, preparing bank reconciliations, depositing funds and preparing reports for the Board. Because the clubs had no faculty counselor, there was no one to advise the faculty advisors on financial planning or the records they should maintain. Additionally, with no faculty auditor, there was no one responsible for reviewing ledgers maintained by the ECA clubs and comparing them to the central treasurer's records. The Treasurer recorded receipts for three clubs totaling $37,911. However, none of these clubs maintained sufficient documentation to determine how much was collected or that receipts were accounted for. In addition, we reviewed 28 deposits totaling $31,521 and found four deposits totaling $4,086 were deposited between 11 and 14 days after the date the faculty advisor brought the funds to the Business Office. The ECA clubs had 56 disbursements totaling $39,630 during the audit period. We also reviewed 20 disbursements totaling $32,553 and found two cash advances totaling $1,780 did not have the proper approvals.

The District reported unrestricted fund balance that exceeded the 4 percent statutory limit from 2014-15 through 2016-17 by an annual average of approximately $860,000. Unrestricted fund balance exceeded the statutory limit because the Board and District officials consistently overestimated appropriations. Furthermore, the budgeting practices made it appear that the District needed to both increase taxes and use appropriated fund balance to close projected budget gaps. However, the District realized operating surpluses and, consequently, appropriated fund balance was not needed to finance operations. We recalculated unrestricted fund balance with the amounts of unused appropriated fund balance which resulted in the totals further exceeding the statutory limit. In addition, as of June 30, 2017, the District reported six reserves with balances totaling approximately $9.6 million or 31 percent of 2017-18 budgeted appropriations. The Board overfunded two reserves and District officials did not use the debt reserve. By maintaining excessive reserves, combined with ongoing budgeting practices that generated operating surpluses and excess unrestricted fund balance, the Board and District officials have levied higher taxes than necessary.

Two Justices, Leroux and Wilbanks, adjudicate legal matters within the Court's jurisdiction, such as vehicle and traffic, criminal, civil and small claims cases. The Justices did not consistently identify whether collections and corresponding deposits were in the form of checks or cash. Fines collected were recorded in the accounting system by the clerk from issued press-numbered receipts. However, for the 16 months covered by our audit period, Justice Wilbanks' monthly cash reports did not agree with bank deposits in any of the months and Justice Leroux's did not agree for two of the months. As a result, we requested bank compositions for both Justices Leroux and Wilbanks, in order to verify recorded collections were deposited to the Justices' bank accounts. We were able to trace each of the 376 duplicate receipts to the bank records and monthly reports and determine all collections were accounted for. However, we found that Justice Wilbanks made 83 percent of bank deposits from three to 67 days late. In addition, the Justices' cash balances exceeded known liabilities by a combined total of $4,728 as of April 30, 2018. Furthermore, the Justices did not prepare bank reconciliations or accountabilities. Finally, the Justices did not maintain accurate outstanding bail reports.

District officials overestimated expenditures by an annual average of $1.2 million (about 7 percent) from fiscal years 2014-15 through 2016-17. Officials also appropriated a total of $1.8 million (3 percent of the subsequent year's budgeted appropriations) in fund balance from fiscal years 2014-15 through 2016-17 that was not needed to fund operations. Because the Board overestimated certain appropriations, the appropriated fund balance was not needed to finance the budget. By including appropriated fund balance in the budgets, it appeared that the District had less unrestricted fund balance than it actually had. As a result, the District reported unrestricted fund balance at the 4 percent statutory limit. However, when unused appropriated fund balance is added back to the reported unrestricted fund balance, the District's recalculated unrestricted fund balance ranged from 6.7 percent to 7.6 percent which, in effect, exceeded the statutory limit by between 2.7 to 3.6 percentage points. Finally, District officials overfunded three of the five reserves.

We reviewed 76 agricultural, senior citizen and Veterans properties with exemptions and found 49 (64 percent) lacked supporting documentation (e.g. applications, renewal forms, income support and military records) to verify taxpayer eligibility. The properties with exceptions had their total taxable assessed value reduced by about $2.9 million. Specifically, we reviewed 30 properties receiving an agricultural exemption and found 26 exemptions lacked one or more pieces of supporting documentation necessary to verify their eligibility for the exemption. All 20 of the properties we reviewed receiving a senior citizens exemption lacked the necessary supporting documentation to verify the eligibility and accuracy of these exemptions. Finally, we reviewed 26 properties receiving veterans exemptions and found three properties (12 percent) lacking one or more pieces of supporting documentation to verify the eligibility and accuracy of these exemptions.

The Board adopted an updated written reserve fund policy in July 2017. The policy requires an annual report to the Board, which includes a description of the reserves, the date of establishment, interest earned, withdrawal details, ending balances and an analysis of projected needs for the reserves in the upcoming fiscal year with a recommendation regarding funding those needs. However, the policy does not address funding methods, optimal funding levels or use resulting in overfunded reserves that are not used. As of June 30, 2018, the District reported 11 general fund reserves totaling approximately $7.3 million and a debt reserve of approximately $594,000 in the debt service fund. We found that District officials properly established all reserves with the exception of the debt reserve, and that the retirement contribution, debt, repair, property loss and liability, and insurance reserves with balances totaling $3.5 million are overfunded and may be unnecessary.

The Board engaged the services of a CPA to provide the following financial advisory services related to the processing and recording of cash for the Village: maintain the general ledger, prepare monthly bank reconciliations and prepare monthly financial statements designed to meet the needs of the Village Board. Our review of Village financial records indicated that these services, such as maintaining the general ledger cash accounts, were not advisory but that the CPA actually performed these activities with little or no oversight from the Clerk-Treasurer. While it is acceptable for the Clerk-Treasurer to obtain advice when performing her duties as the Village's chief fiscal officer, she is responsible for the Village's financial operation and should have a complete understanding and approval of the Village's financial records and reports.

The Board and District officials have not adopted adequate security policies and procedures to safeguard IT assets. Specifically, the Board has not adopted IT security policies addressing data classification and regulations addressing the protection of personal, private and sensitive information (PPSI). Further, the Board has not adopted policies addressing password management, wireless security, remote access, online banking, user account management and access rights, sanitation and disposal of IT equipment, backup and disaster recovery. In addition, District officials did not provide IT security awareness training for employees. Furthermore, the District's disaster recovery plan was inadequate because it did not designate alternate work locations and IT equipment or identify staff responsible for restoring critical applications and systems listed in the plan. In addition, the plan did not provide details on how often the plan should be tested or updated. The Board did not develop a policy or written procedures for maintaining leave records. As of February 27, 2018, leave balances for 31 of the 40 non-instructional employees tested (78 percent) were inaccurate.

The Board sought opportunities to share services with neighboring districts to implement cost savings and maintain programs for students. Beginning in August 2015, the Board began sharing the Business Administrator position with the Roscoe Central School District (Roscoe CSD). Additionally, in January 2017, the Board entered an agreement with the Roscoe CSD to share the Superintendent position. By sharing these positions, District officials saved approximately $326,000 in total salaries and benefits during this period compared to the amount that would have been paid if the positions had not been shared with the other district. The Board also shared sports programs with other districts to ensure their students had varied sports opportunities available to them while decreasing expenditures by $90,000 since 2013-14. Finally, we found that District officials could potentially save taxpayers $284,000 per eight-student classroom by providing select special education services in-house.

The Board did not approve all compensation and some payments were not paid accurately or supported sufficiently. We reviewed payroll payments totaling $4.7 million to 151 employees and found almost $418,000 in payments (9 percent) were not accurate, supported or paid in accordance with contracts or Board resolutions. For example, the Board did not authorize salaries paid to six individuals totaling $347,368 and paid $11,690 to an employee who worked offsite without certainty as to the work performed. In addition, manual adjustments for fingerprint time clock system entries were not adequately supported or approved by supervisors.