School officials effectively designed and implemented procedures to ensure that compensation payments were accurate, and properly authorized. School officials accurately paid 15 employees who were paid $123,754 over four payroll periods during the audit period. We reviewed the gross pay calculations of these employees to determine whether salaries and pay rates were authorized, accurately paid and supported by time records. We found that employee compensation was accurate, adequately supported and properly authorized. School officials established and adhered to an effective payroll process that decreases the risk that errors or irregularities in processing and paying payroll could occur.

The Supervisor neither maintained nor required the bookkeeper to maintain complete, accurate and up-to-date accounting records and reports, which included performing bank reconciliations for all bank accounts. The bookkeeper maintained two sets of cash ledgers; in addition to the Town's accounting system, she also maintained manual cash ledgers. For the bank reconciliations that were completed, the bookkeeper did not reconcile the bank statements to the Town's accounting system, but instead reconciled them to the manual cash ledgers which were not accurate. When we reviewed the cash ledgers, we found several recording errors in the Town's accounting records and manual cash ledgers. We also found that the bookkeeper had delegated her duties to her private accounting firm and her employees were performing bookkeeping duties on her behalf. For example, we noted several instances where her employees were signing off on bank reconciliations as completed and/or reviewed. The Supervisor did not provide the Board with adequate monthly financial reports to make sound financial decisions for the Town. Due to the lack of timely and accurate records provided by the Supervisor, the Board was unable to properly assess the Town's financial condition. The Board appropriated fund balance of $90,241 and $75,726 in 2017 and 2018, respectively, in the general town-wide fund. The financial statements prepared by the CPA subsequent to the preparation of the 2017 budget showed that the general town-wide fund had a deficit of ($86,345) in unassigned fund balance as of December 31, 2016; therefore the Board appropriated fund balance that did not exist. As of July 17, 2018, neither Town officials nor the CPA could provide preliminary financial information for December 31, 2017. However, upon reviewing the Town's unaudited financial records, we anticipate that the general town-wide fund's financial condition likely worsened.

The Village's governing board agreed to participate in the Commission in coordination with the Town's governing board. However, the boards did not enter into an agreement or formally outline the Town's or the Village's roles and responsibilities. The governing boards also did not establish policies or procedures for Commission operations or outline the Board of Commissioners' (Board) responsibilities. The Commission's financial activity was not properly recorded and reported and the Board did not approve salaries and stipends. Furthermore, the Board cannot ensure all collections were remitted and deposited. Collection records were inadequate and the collection of certain fees was not enforced. Finally, claims were not audited before payment.

The Board never prepared an itemized budget for the town hall expansion project outlining the financing sources needed to fund the estimated cost. This also contributed to budget status reports for the project not being presented to the Board during the audit period. As a result, the Board could not effectively monitor the project, ensure financing sources were sufficient to fund expenditures incurred, or ensure expenditures did not exceed the estimated cost. In addition, accounting records for the project were not maintained throughout the fiscal year. We also found that the Board did not authorize $79,155 in interfund advances made from the general fund to the project, which were used to pay for project expenditures prior to the Town receiving $1.1 million in debt proceeds on November 18, 2016. An additional general fund advance of $38,000 was made on February 13, 2018, which was approved by the Board on February 12. As of March 31, the project owed the general fund $117,155 for these interfund advances. We project expenditures will exceed the financing sources for the project by approximately $98,000 (7 percent), resulting in the project not being able to repay interfund advances made from the general fund.

The Treasurer did not adequately secure unused check stock. In February 2016, the Treasurer discovered three missing, unused checks and properly reported them to the Board. However, the Treasurer did not initially place a stop-payment order on the missing checks because he believed that no one would try to access the check stock in his private office, but contacted the bank to place stop-payment orders after we asked about the checks. District officials believe that, in December 2017, an individual with temporary access to the Treasurer’s private office submitted two fraudulent checks ($850 and $2,357) to the bank, one of which ($850) was processed before the stop-payment order; the bank refused to accept the other check. District officials promptly reported the theft to law enforcement and were fully reimbursed by the insurance company. In addition, the Board did not approve disbursements prior to payment. However, as a result of our audit, District officials implemented a voucher system to ensure Board approval. We commend them for taking prompt corrective action. Finally, the Board did not ensure annual financial reports were filed. The Treasurer did not file the AUD for 2010 through 2016 because officials were unaware of the statutory requirement to do so. As a result of our audit, the Board contracted with an accounting firm to file all the outstanding AUDs.

District officials need to improve budgeting practices to more effectively manage the general fund balance. The District has accumulated unrestricted fund balance of more than $1.8 million as of June 30, 2017, or 15.25 percent of the 2017-18 budgeted appropriations and exceeded the statutory limit by 11.25 percentage points. While District officials appropriated fund balance annually to finance operations, none of the appropriated fund balance was used to finance operations for the 2015-16 through 2017-18 school years. The budgets overestimated appropriations by more than $2.03 million or 6 percent from 2015-16 through 2017-18. As a result, the District experienced operating surpluses from 2015-16 through 2017-18, total fund balance increased and unrestricted fund balance exceeded the statutory limit by 7.77 to 10.69 percentage points. The Superintendent is aware that prior adopted budgets included overly conservative estimates and informed us that District officials planned on including more reasonable estimates in the 2018-19 budget.

The Board or membership did not ensure that the bylaws were adequate or adopt supplemental financial policies or procedures. They also did not conduct or contract for an annual audit of the books and records of the Treasurer and Financial Secretary. In addition, they did not audit claims prior to payment and ensure there was sufficient supporting documentation for all claims. Finally, the Association entered into transactions to purchase new insurance policies, whereby an insurance agency received 15 percent of the gross premium. At the time of those transactions, one Board member, who also served on the Association's two-member insurance committee, was employed by the insurance agency. The Board member informed us that he was paid 50 percent of the insurance agency's 15 percent fee in the first year and 40 percent of that fee in each renewal year. Therefore, he received commissions totaling $596 for 2016 and $483 for 2017. Under these circumstances, he appears to qualify as an “interested person” under the policy. However, we found no documentation in the minutes of the Board member's disclosure of the financial interest, the Board's process and determination of whether his financial interest constituted a conflict of interest, or the Board's action to address his interest in the contract, as required by the policy.

The Treasurer did not maintain accurate accounting records and failed to file required annual financial reports for the last four fiscal years. Although the Treasurer records the deposits to appropriate revenue codes and disbursements to appropriate expenditures codes, he does not maintain an appropriate general ledger reflecting accurate cash, payable and receivable balances. In addition, revenues and expenditures are not recorded timely. The Treasurer's practice of recording deposits and cleared checks as shown on bank statements and identifying accruals through a review of Board minutes at year-end or later, rather than from internal source documents of receipts and disbursements, continues to provide unreliable and inaccurate financial records and reports, including the monthly budget-to-actual reports provided to the Board. As a result, the Board did not adequately monitor the Village's financial condition. The general fund's unrestricted fund balance decreased from $213,327 as of fiscal year-end 2014 to $30,487 as of fiscal-year end 2018. While budget-to-actual results were generally reasonable, deficits occurred in two fiscal years because revenues were overestimated and in 2014-15 the budgeted appropriations were overexpended.

The Board-adopted 2014-15 through 2016-17 budgets overestimated appropriations by an average of 9 percent over these years. District officials' budgeting practices generated almost $3.7 million in surpluses over this three-year period. To reduce the unrestricted fund balance to within the statutory limit, officials transferred more than $3.5 million to the capital building reserve and $200,000 to the capital bus reserve over this same period. As a result, reserve fund transactions were not transparent to the public, because each year the funding transfers were not included in the adopted budgets but instead transferred at year-end. The Board has also not adopted comprehensive multiyear financial and capital plans. In addition, District officials retained an annual average of $798,735 in the debt service fund over the past four years (2013-14 through 2016-17) without using this money for debt service payments. Finally, District officials did not apply for transportation aid in a timely manner. As a result, the receipt of aid totaling approximately $148,672, which could have been used to reduce real property taxes or for other purposes, was delayed.

The Board did not adopt realistic budgets, which resulted in excessive unrestricted fund balance that was not substantiated by planned uses in any fund balance policy or multiyear financial or capital plans. The District's unrestricted fund balance increased by $529,860 (28 percent) over four years to more than $1.5 million at the end of 2017, which was 42 percent of the ensuing year's appropriations. While the Board budgeted to use fund balance as a financing source in 2015, 2016, and 2017, which should have reduced fund balance by approximately $350,000, fund balance instead increased by an average of $380,000 each year, due to consistently positive budget variances. District officials underestimated revenues in three of the last four years by a total of $180,465 and overestimated expenditures by $925,686 resulting in a four-year positive budget variance of $1,106,151. These variances were the result of conservatively estimating expenditures while not budgeting for all expected revenues. The Board also did not adopt any information technology (IT) policies. Finally, the Board did not perform an adequate claims audit and seek competition for professional services.

We found that employees used computers to visit social networking, shopping, travel, entertainment and blogging websites, apparently for non-school purposes, and performed other Internet research and browsing of a personal nature. Although the Board adopted an acceptable use policy and web filters were in place, District officials did not monitor for inappropriate use in accordance with the board-adopted acceptable use policy. In addition, District officials did not properly secure the server room.

The Board and District officials did not adopt and implement procedures governing the operations of extra-classroom activity (ECA) funds. As a result, the central treasurer and faculty advisors were not provided with guidelines to properly account for and oversee the District's 49 ECA clubs. We reviewed the records and activities of 12 clubs. During our audit period, the 12 clubs had total cash receipts totaling $1.07 million. We found that the central treasurer did not have supporting documentation for 30 receipts totaling $137,837 and three clubs did not maintain supporting documentation for 39 cash receipts totaling $168,491. For five collections totaling $6,879, sales tax totaling $473 was not set aside for remittance to the New York State Department of Taxation and Finance. Finally, ledgers were not always maintained.

Justices did not provide adequate oversight of Court operations. The Justices did not develop written policies and procedures for day-to-day Court operations. Instead, they relied on the clerks to perform most duties, did not segregate incompatible financial duties and provided limited oversight of Court operations. Collections were not always properly and timely recorded and deposited. The Justices submitted monthly reports to the Justice Court Fund and told us they reviewed monthly reports, bank statements, reconciliations and accountabilities. However, there was no indication on the reconciliations and accountabilities that the Justices had reviewed them. Court personnel also did not properly enforce pending tickets. As a result, 283 (23 percent) were not submitted to the Department of Motor Vehicle (DMV) scofflaw program or not reported or incorrectly reported to the DMV.

As a result of our review of 71 non-payroll general fund claims, we found that the purchase orders for 12 purchases (6 percent) totaling $61,109 were confirming purchase orders, demonstrating that the controls over claims processing were not always effective. Although these purchase orders were not in compliance with the District's procurement policy, the auditor did not require documentation of why the purchases were not made in conformity with the policy before approving the purchases for payment. For example, a $44,670 purchase of 30 desktop computers was made on June 20, 2016 and a confirming purchase order was issued on July 1, 2016, 11 days after the order was placed. We also found that 17 purchases totaling $6,679 (5 percent) did not have a requisition form and the requisition forms for 18 purchases totaling $4,765 were not dated. Although all of these purchases appeared to be reasonable and for appropriate purposes, the routine use of confirming purchase orders circumvents internal controls and weakens the procurement and budget control process.

In 1991 the Village established a refuse collection district by local law. The Village includes the annual refuse charge on the Village tax bill. The refuse collection charges are based on the number of units in a dwelling. The Village has 1,011 units in 355 dwellings using the refuse collection services. Each dwelling is charged $396 per unit, which resulted in revenues of $400,356 for refuse collection services in the 2017-18 fiscal year. The Village outsourced its refuse collection operations for the same year and contracted for this service for $215,352. The refuse revenues were $185,004 more than the contractual amount of the outsourced service. The Deputy Clerk provided us with the refuse budget for 2017-18. The budget did not include an amount for revenues but it did include total budgeted appropriations of $395,000, which included the cost of the contract ($215,352) and administrative salaries and overhead costs of $179,648 which would be 45 percent of the total Village costs for these categories. Village officials were not able to support the salary and overhead cost allocations with documentation such as actual time spent on administering refuse collection operations. Finally, because the revenues and expenditures for refuse collection are comingled with general fund revenues and expenditures, there was no comparison of revenues to expenditures to determine any amount that should be used to reduce future refuse costs and to improve budget estimates going forward. Instead, excess refuse collection revenues were combined with other general fund revenues and used for general fund operations.

The City of Albany Industrial Development Agency (CAIDA) did not incorporate goals into project agreements. The CAIDA did not have an adequate or consistent system to incorporate goals into project agreements even though the projects were approved based on specific characteristics. Generally, only goals related to employment were incorporated in project agreements when a project benefits agreement was included. However, 13 of the 15 projects met or exceeded their job creation and/or retention goals. These 13 projects had 2015 and 2016 employment goals to create and/or retain 1,034 and 1,270 full time equivalent (FTE) jobs and reported a total of 1,666 and 1,876 FTE jobs, respectively. Finally, the CAIDA did not monitor project performance for investment or revitalization goals.

The District's benefits clerk maintained a list of all retiree health insurance enrollees and the type of coverage provided (family or Individual) and reconciled the list monthly with the insurance providers' invoices. However, the District does not have procedures for independently verifying whether retirees are still living or whether their dependents are still eligible for coverage. Instead, the benefits clerk relies on NYSHIP to identify retirees who are deceased and to issue any appropriate credits or refunds for any premiums paid for periods after the retirees' deaths. The clerk also relies on quarterly reports from the New York State and Local Retirement System (NYSLRS) to notify them when a retiree dies. In addition, the District requires Medicare-eligible retirees to annually certify in writing that they are still eligible for reimbursements. While these practices collectively provide updates of a retiree's status, relying on them may not identify all deceased retirees.

The Clerk-Treasurer performs most aspects of the cash receipts and disbursements processes. Her duties include collecting, recording and depositing money, processing payroll, preparing abstracts of audited claims, preparing bank reconciliations and preparing and signing all checks. She performs these duties without adequate oversight. Having these incompatible duties allowed the Clerk-Treasurer to disburse payroll payments without another official's review to ensure the payments were accurate and appropriate. We reviewed all payments made to all four officials and nine employees totaling $34,514 and found that, although the elected and appointed officials were paid at Board-approved rates, hourly employees were not. More specifically, the Clerk-Treasurer underpaid all nine hourly employees by a total of $2,800. Finally, the Clerk-Treasurer was able to adjust billings without another official's review and approval, increasing the risk that inappropriate adjustments could be made without detection or correction.

District officials established a well-designed system over separation payments and properly implemented the system. The system included adequate written procedures covering how payments should be made. Both the human resource clerk and analyst correctly calculated payments and the payments made were supported by collective bargaining agreements and employment contracts. In addition, the Board approved retirements and other separations from District employment before any payments were made.

The Board was unable to sufficiently oversee the Clerk-Treasurer's duties. Although it reviewed claims and received a monthly report from the Clerk-Treasurer, these reports were inaccurate. The Board requested that the Clerk-Treasurer provide reports with more accurate and complete information. However, the Clerk-Treasurer failed to do so. The Clerk-Treasurer also failed to provide the Board with accurate budget-to-actual reports and complete financial reports each month. Further, the value of these reports was greatly diminished because accounting records were unreliable and bank reconciliations were inaccurate and not prepared for all accounts. Because of ineffective recordkeeping, the certified public accounting firm was unable to complete its audits for the last two years. The Board hired another certified public accountant who was paid $30,000 to correct the records. Finally, the Clerk-Treasurer did not adequately segregate the deputies' duties or provide sufficient oversight of their work. As a result, many of their duties were performed without Board approval or the Clerk-Treasurer's knowledge or oversight.