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.

Town officials have plans for the levels of unreserved fund balance they maintain. However, they have no long-term plans for funding equipment and infrastructure needs. Town officials have an informal plan to maintain unreserved fund balance at approximately three to four months' worth of expenditures. Accordingly, over the past three years, officials have maintained an average of 22 percent ($135,000) of appropriations in their general and highway funds combined. Furthermore, while they maintain capital and repair reserves totaling $117,000 as of December 31, 2017, they do not have multi-year plans for funding or using the reserves to ensure financial resources are available to finance future capital needs, such as highway equipment. In addition, although the condition of the Town's roads was generally fair, the Highway Superintendent and Deputy Supervisor stated the Town's western roads need some repairs and will be the focus of the Highway Department for 2018. Finally, the Town owns 11 pieces of major highway equipment which, in total, are over their useful life by an average of three years. While useful life may not be an indication of how long a particular piece of equipment will last, Town officials should consider this information when developing long-term plans.

District officials need to improve their budgeting practices to ensure fund balance is reasonable. The District budgeted planned operating deficits by appropriating approximately $5.5 million in fund balance annually as a financing source for 2013-14 through 2017-18. This appropriation of fund balance made it appear that unrestricted fund balance was within the statutory limit. However, because officials underestimated revenues and overestimated expenditures in four of these years, operating results did not generate the planned deficits. As a result, $22.1 million (79.5 percent) of the $27.8 million total appropriated fund balance went unused. When the unused appropriated fund balance was added back, the District's recalculated unrestricted fund balance exceeded the statutory limit in four of five years by 3.3 to 3.7 percentage points.

The Board did not use an appropriate process when selling and acquiring property, resulting in the likely expenditure of more money than necessary. On July 25, 2016, the Board adopted a resolution declaring the Southside Municipal Center (SMC) surplus and agreed to sell the building to a private developer (SMC purchaser) for $2.2 million. However, the Board did not follow good business practices when it sold the SMC. The Board received only one offer for the property, did not use a real estate broker to identify potential buyers and did not publicly advertise the sale to obtain other offers, for a potentially higher selling price. We estimate that the sale price was nearly $718,000 less than the costs incurred by the Town to purchase and renovate the SMC building. In addition, the Town purchased a former fire hall, senior center and a residential building for $586,000. The Town estimates it will take $3 million to $4 million to renovate the building for use as a new Town hall. However, the Board did not follow good business practices before it purchased these properties because it did not conduct a feasibility study for the proposed project, develop a project budget, obtain estimates for the cost of renovations (necessary to convert the building into Town hall) or obtain a professional appraisal to establish the approximate value of the properties before it approved the purchases.

The Board has not developed an adequate procurement policy. We reviewed the Board minutes and found that the last time the policy was reviewed and amended was in 2015. However, the competitive bidding dollar thresholds listed in the policy have not been updated since General Municipal Law was amended in 2010. In addition, officials did not always obtain quotes in compliance with the procurement policy. Officials did not obtain bids, quotes or use request for proposals, as required, for three payments totaling $26,683. These included repairs for a highway truck ($14,695), fuel ($9,997) and document scanning services ($1,991). Furthermore, the dollar thresholds established by the Board requiring quotes for purchases of goods and services, not subject to competitive bidding, appear high for the Town's size. The policy requires officials to obtain quotes for purchases in excess of $3,000 and public works contracts in excess of $5,000. The Town may realize cost savings by reducing the thresholds for purchases requiring quotes in the procurement policy.

We identified 37 eligible employees who received separation payments totaling $516,017 during the audit period. To determine whether all payments were accurate per the applicable collective bargaining agreement or individual employment contract, we recalculated the separation payments using available calculations performed by the Business Manager and other supporting documentation, including leave records and Board-approved pay rates and salaries. Except for minor discrepancies which we discussed with District officials, we found that the separation payments were accurately paid in accordance with Board-approved agreements and the contract. However, although the claims auditor independently reviews the separation payment calculations processed by the accounts payable clerk, there is no independent review of separation payment calculations processed by the payroll clerk in the payroll system.

To determine whether the 10 school districts that we audited provide physical education (PE) classes consistently with the regulations of the Commissioner of the New York State Education Department (SED).

The Board did not adopt a fund balance and reserve policy to establish the levels of fund balance to be maintained and the reserves to be funded and used. Since 2015, the total combined fund balance in the general and highway funds increased by $450,000 and, as of December 31, 2017, was 83 percent of 2017 expenditures. Over the last three years, conservative budgeting led to combined overestimated expenditures of $495,000 and underestimated revenues of $226,000 in the general and highway funds which contributed to the surpluses generated. Officials have not developed multiyear financial or capital plans to address significant infrastructure and equipment needs. However, the Board is developing a comprehensive plan to identify and address the Town's future financial and capital needs.

The Board did not establish sufficient policies or procedures for the claims audit process and did not comply with the law or enforce the limited bylaw provisions. As a result, the Board did not properly audit and approve all claims before payment. The Board also did not adequately ensure that Library staff followed and documented compliance with the Town's procurement policy. Furthermore, the Board did not adopt a policy to address accounting for or the use, approval and reporting of private funds maintained by Library staff. Although the Board adopted a patron acceptable use policy, it did not adopt IT policies addressing staff acceptable use, password management, user accounts, access rights, backups, hardware and software inventories, connecting personally owned devices to Library computers and breach notification. The Board also did not adopt a disaster recovery plan or provide users with cyber security training. Finally, the Board did not authorize salaries and pay rates. The Director told us that the Library follows the same increases in pay rates authorized for Town employees and that the Board did not formally authorize the pay rate schedule, but is informed of the increases that will be provided.

Employees did not complete or issue duplicate receipts for all money collected. During 2017, the Assistant reported approximately $546,000 in total money collected for contracted fees ($402,000), gasoline ($124,000) and booth ($20,000) sales on weekly receipt reports. While the Assistant and other employees completed duplicate receipts for the contracted fees such as seasonal docks and camping, the duplicate receipt copies were not provided to patrons. Further, employees did not issue or retain receipts for money collected for either gasoline sales or booth sales for fees related to parking, boat launch, ice or other miscellaneous fees that employees collected daily. The enforcement of probation obligations in arrears owed by offenders is the responsibility of the individual probation officers, under the supervision of probation supervisors. A collections clerk (clerk) attempts to enforce obligations in arrears for cases which are collection only, when the offender is no longer on active probation but the obligations are still owed to the victim. The clerk is also responsible for locating victims to whom restitution is owed and uses methods similar to those used by probation officers to locate victims. While we found that the Probation Department (Department) generally took sufficient action to collect obligations and locate victims, we identified certain opportunities for the Department to continue to improve operations. We reviewed 14 individual case files for offenders with obligations in arrears totaling more than $900,000 and two months of undisbursed restitution owed to seven victims totaling more than $10,200. For example, obligations in arrears for one case was not sufficiently enforced, leading to $110,000 in obligations still outstanding. Efforts have not been made since June 2015 to locate this offender.