District officials need to improve budgeting practices to more effectively manage fund balance. From 2014-15 through 2016-17, the District reported unrestricted fund balance within the 4 percent statutory limit. Although the Board appropriated an average $3.6 million of fund balance annually to finance operations, the District did not need or use it because appropriations were overestimated. Instead it realized annual operating surpluses and not a budgeted operating deficit. If the District had budgeted more realistically and not unnecessarily appropriated fund balance, unrestricted fund balance would have exceeded the statutory limit by $3.3 million, or 6.1 percentage points, as of June 30, 2017. When unused appropriated fund balance is added back, the District's recalculated unrestricted fund balance as a percentage of the subsequent year's budget ranged from 10.1 to 11.2 percent over the three-year period. Extra-classroom activity collections were remitted to the central treasurers with a deposit form documenting the activity's name, type of fundraiser, composition and total amount to be deposited. The deposit forms were signed by the applicable student treasurer, adviser and central treasurer. We reviewed 24 remittances totaling $52,736 made by eight clubs and found that all were supported by a properly authorized deposit form, accurately accounted for in the central treasurers' ledgers and deposited intact and timely. However, our review of the student treasurers' independent records for the same remittances found the records were not adequate for 16 remittances totaling $33,833. Although the student treasurers prepared deposit forms that were remitted to the central treasurers, they did not maintain adequate records for collections, such as receipts or other documentation supporting the sources, dates and amounts of collections.

The head mechanic did not maintain a fuel inventory. The tanks were not stick measured and the tank meters were not in proper working order. The computerized fuel system did not track fuel tank levels because the head mechanic did not know how to program the system to activate the tank level feature. Vehicle fuel inventory records are not maintained. Vehicle mileage records are not compared to fuel consumption. Storage tanks are not adequately secured or inspected. Fuel purchases are not compared to fuel usage records.

District officials need to improve budgeting practices to effectively manage the District's financial condition. The District generated annual operating surpluses averaging more than $1.4 million over the last three fiscal years. As a result, total fund balance increased 35 percent: from $12.4 million as of June 30, 2015 to $16.6 million as of June 30, 2017. While approximately $5.1 million of fund balance was restricted in reserve funds at the end of the 2016-17 fiscal year, $11.5 million was unrestricted. During the period, unrestricted fund balance exceeded the statutory limit by $3.6 million to $7.6 million, or 6.5 to 13 percentage points. The Board appropriated fund balance averaging $1.4 million in the adopted budgets for the three years examined. However, with each year resulting in an operating surplus, none of the appropriated fund balance was actually used. With unused appropriated fund balance added back, the District's recalculated unrestricted fund balance ranged from 12.5 to 19.8 percent of the subsequent year's budget.

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 $2.4 million as of June 30, 2017, or 11.7 percent of the 2017-18 budgeted appropriations and exceeded the statutory limit by about 7.7 percentage points. While District officials appropriated fund balance annually to finance operations, none of the appropriated fund balance was used for operations for the 2013-14 through 2015-16 school years. Although District officials appropriated fund balance each year to finance operations, the fund balance was not always used because the officials consistently overestimated appropriations. By including significant amounts of appropriated fund balance that was not needed to finance operations, the Board made it appear the District has less unrestricted fund balance than it actually had. In effect, it is a reservation of fund balance that is not provided for by statute and a circumvention of the statutory limit allowed by New York State Real Property Tax Law. When the amount of appropriated fund balance that was not used is added back, the unrestricted fund balance exceeded the 4 percent statutory limit by amounts ranging from 8.2 to 14.8 percentage points.

District officials did not ensure that employees, at least annually, receive cybersecurity awareness training. According to officials, they provided their employees with verbal and written reminders and specific directives regarding data security and computerized information. We also examined 5,551 enabled network user accounts (2,764 on one system and 2,787 on another system) to determine whether they are in accordance with industry best practices. We found 3,118 user accounts (56 percent) that had not been used in over six months. After we brought this to their attention, District officials said they disabled or deleted all of the 2,764 unnecessary user accounts from the one system. For the other system containing 2,787 user accounts, during our audit, District officials said they disabled or deleted 20 accounts and that most of the unused accounts belong to current and former students.

The Board members did not have a fund balance policy or include an estimate of fund balance when they submitted their budget to the Town. As of December 31, 2016, the District's unrestricted fund balance totaled more than $1.3 million, or about 83 percent of 2017 budgeted appropriations. In contrast, unrestricted fund balance at the end of 2014 was more than $878,000. The budget remained at about $1.6 million each year. We compared the District's budgeted revenues and appropriations to the actual results of operations for 2014 through 2016. Revenue estimates were reasonable and generally close to the actual revenues received. However, the Board overestimated appropriations each fiscal year. Overestimated appropriations totaled $535,816, or about 12 percent of actual expenditures for the three year period, an annual average of $178,605. District officials did not have a multiyear financial plan to address the use of fund balance and reserves to fund operations. The District did not develop a policy or written procedures for the maintenance of leave accrual records or formally authorize the leave accrual benefits to be earned and carried over for each employee. As a result, District officials paid $15,747 for 635 hours of leave benefits that were not authorized by the Board.

Cash controls over fundraising activities need to be improved to ensure that amounts collected are properly recorded and deposited. During our audit period, Department officials held 26 fundraising events. While two members counted cash collected at fundraisers, they did not record and certify the amounts collected on cash reporting forms before submitting money to the Treasurer. Further, Department officials did not use tickets or any other form of receipt to track sales at fundraisers. Although the Treasurer periodically reported revenues from fundraisers at monthly meetings, Department officials did not compare amounts reported to the Treasurer's deposits. The membership also did not approve all disbursements as required by the bylaws. Finally, Department officials did not provide adequate oversight of the Treasurer's duties.

The Treasurer did not file accurate annual financial reports with OSC. We identified improper accounting practices and related recording and reporting inaccuracies reflected in the accounting records and monthly reports to the Board, and in the AUD. The Treasurer inaccurately recorded capital reserves and operating fund expenditures. In addition, the Board inappropriately authorized the use of capital reserve funds for non-capital expenditures. The Board has not developed and adopted multi-year financial and capital plans or written policies and procedures to govern the level of fund balance and capital reserves to be maintained. The Board did not conduct or contract for an annual audit of the Treasurer's and Justice's books and records. The Village's procurement policy did not require solicitation of quotations or proposals for procuring professional services. We found that the Village did not seek competition for 30 payments totaling approximately $276,000, made to seven (64 percent) of the 11 vendors tested. The Village also did not have or provide a written contract to support eight payments made to three of the 11 vendors.

We reviewed 10 contracts with budgets totaling approximately $16 million during the audit period, nine of which were required to submit performance reports. All nine agencies submitted the reports, and eight met all requirements. However, the remaining agency − responsible for providing training, education, technical assistance and applied research services to individuals with disabilities and their families − did not submit verification backup. This agency received approximately $1.4 million in 2016 and $347,718 in the first quarter of 2017. Because Department officials did not obtain and review the supporting documentation, they could not be assured that reported numbers were legitimate or the agency performed as contracted.

During our audit period, the Committee and the Board approved one local business loan for $5,040, which was less than 1 percent of available loan funds. Instead of using the UDAG repayments as outlined in the Bolton Community Development Program (BCDP) manual, the Board authorized loaning approximately $4.5 million from the community development (CD) fund for six Town capital projects. Although the Board approved all six loans by resolution, these loans were not consistent with the adopted BCDP manual. The six loans to Town funds for capital projects ranged from $150,000 to $2 million and were authorized at an annual interest rate of 1.385 percent for terms ranging from 8 to 29 years. Further, while the loan to the local business was governed by the BCDP manual, the Board did not develop any formal plans or policies, as recommended by the United States Department of Housing and Urban Development (HUD), to guide officials in approving the use of the repayments for Town capital projects. The CD fund's loan activity is not adequately recorded in the accounting records and reported to Town officials and the public. We found that all six loans made from the CD fund to other Town funds during our audit period totaling $4.5 million were recorded in the accounting records as a one-time transfer of funds from the CD fund. These loans to Town fund balances are tracked off the books in separate amortization schedules and not included in the accounting records as a receivable in the CD fund and a liability in the borrowing fund.

Our review disclosed the following issues which should be reviewed by City officials for appropriate action. The Yonkers Public School District's budget request is $604.8 million for appropriations. The District has appropriated all of the $24.1 million projected unassigned fund balance at the end of the 2017-18 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 $24.1 million budget gap. In addition, the District's budget request does not include an appropriation for textbooks, and underestimates the appropriations for personal services and unemployment reimbursements. The City also continues to rely on nonrecurring revenue, such as specialized State aid and fund balance, to balance its budget. Revenue estimates for metered water sales, sales tax 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 overtime (firefighting and police) and workers' compensation insurance could be underestimated. Finally, the City's proposed budget does not include a contingency appropriation.

The Board did not adopt a financial plan for the maintenance of a reasonable level of fund balance or for the funding and use of reserves. As of December 31, 2017, unrestricted fund balance was 9 percent of 2018 budgeted appropriations. In addition, the District maintained two capital reserves: an equipment reserve and a building reserve. Both capital reserves have been in place for over 15 years. From January 1, 2016 to December 31, 2017, the reserve balances increased by $470,000. The District funded the reserves from budgeted appropriations and added more funds near fiscal year end from the annual operating surplus. The District's 2018 adopted budget included funding of $150,000 for the equipment reserve and $20,000 for the building reserve. In total, these amounts represent 27 percent of 2018 budgeted appropriations. The District's real property tax levy has also increased by $35,500 from 2016 to 2018 (6 percent). The District also realized an operating surplus in 2016 ($112,755) and 2017 ($61,500). Although the capital reserves make up a significant amount of the total fund balance, the Board has not adopted a multiyear financial plan to address the District's operational and capital needs.

The Board did not adopt individual budgets and the Supervisor did not maintain separate accounting records for each water district. Instead, the Board adopted one operating budget that combined all water operations. In addition, the Board adopted two sewer district budgets, even though it established four sewer districts, and the Supervisor maintained one set of accounting records for all sewer operations. As a result, the Board and Town officials cannot monitor each district's financial condition to determine if each district is self-sufficient. The Supervisor did not account for revenues and expenditures associated with improvement areas in the general fund as required by New York State Town Law. Instead, the financial activity associated with improvements is incorrectly combined with the Town's special districts and the intermunicipal activity. Finally, the Supervisor did not separately account for the revenues and expenditures from the intermunicipal agreements with neighboring towns, to ensure that revenues cover operating costs.

The Department's bylaws establish the Treasurer's responsibility for maintaining the Department's accounting records. However, the bylaws do not provide clear guidance for how the Treasurer is to perform these duties. The Treasurer did not provide formal, detailed reports of cash receipts and disbursements or prepare and provide bank reconciliations. Instead, the Treasurer presented an oral report during the monthly membership meetings summarizing cash receipts and disbursements. She also prepared a report reflecting the bank statement activity. However, the reconciled cash balance is not reported because monthly bank reconciliations are not prepared. Because the members are not provided with bank reconciliations or cancelled check images, Department officials lack the detail necessary to adequately oversee the financial operations. Additionally, the Treasurer did not annually prepare or present all revenues and expenses to the membership as required by the bylaws. Finally, The Treasurer has not prepared and filed the Department's 2016 Form 990 with the IRS and annual report of foreign fire insurance tax receipts, expenditures and the remaining balance with OSC. Furthermore, Department officials were unable to provide documentation of their federal tax-exempt status.

We found that all disbursements were for appropriate purposes and properly supported and all fees received by the Court were remitted and reported in a timely manner. However, the Justices' cash balances exceeded known liabilities by a combined total of approximately $6,340 as of October 12, 2017, and Court officials were unable to determine the composition of these excess balances. In addition, the Justices' bail reports included bail for 18 individuals totaling $7,150 that could not be traced to any open or closed cases during our audit period. Finally, the Board did not conduct the required annual examination of Court records or contract with an independent public accountant for an audit.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. However, our review identified several issues that require the City Council's attention. The refuse and garbage charges of $9.6 million include an increase of $20 per sanitation parcel which the City has not yet authorized. The proposed budget includes appropriations of $1.8 million in termination salary payments, yet expenditures have averaged $2.6 million over the last three years. In addition, City officials only partially implemented the Comptroller's recommendations in our May 2017 review of the 2017-18 proposed budget. For example, they did not modify the adopted budget to reflect existing refuse and garbage rates, in the absence of City approval of the proposed rate increase. They also did not modify overtime appropriations. As of March 31, 2018, overtime expenditures were $2.98 million, exceeding the adopted budget by $246,216. Finally, the City's proposed budget includes a tax levy of $41,358,266 is $3,712,839 above the limit established by law.

Authority officials did not develop comprehensive written procedures for managing system and network access. We were able to match all 241 accounts that access the Authority's administrative and business system to current Authority and third-party users. In addition, the Authority's network has 696 user accounts that have not been used in the last six months and of these, 75 user accounts were last used more than four years prior, while 377 have never been used. Although the Board adopted a computer use policy, it was last updated in January 2012. We tested 10 employees' web histories and determined that five employees visited social media, shopping websites and personal email. Finally, while the Authority provides brief IT training upon hire, there is no formal IT training on a regular basis.

The Board did not properly manage fund balance levels. The general fund's total fund balance increased by 56 percent from 2014-15 through 2016-17, resulting in an accumulation of $799,870, or 237 percent of general fund expenditures. Additionally, the water fund's fund balance increased by 43 percent for the same three fiscal years, resulting in an accumulation of $411,958, or 472 percent of water fund expenditures. While general fund and water fund revenue estimates were reasonable, the Board overestimated general fund expenditures by an aggregate of $111,583 (9 percent annual average) and overestimated water fund expenditures by an aggregate of $210,800 (44 percent annual average). The Board also did not provide proper oversight of the Clerk-Treasurer's cash receipts and disbursements responsibilities because the Mayor and Board did not segregate the Clerk-Treasurer's duties or implement compensating controls. Finally, the Board did not ensure water rents and penalties were properly billed. For example, one customer was never billed, the second had not been billed since 2005, the third since 2014 and the last since 2015. One year of estimated billings for these customers totaled $1,140. Furthermore, water penalties were not billed in accordance with the Village's policy.

The general fund's year-end total fund balance increased by 46 percent from 2014-15 through 2016-17. Budgeted general fund appropriations in 2015-16 and 2016-17 exceeded expenditures by an annual average of 30 percent while actual revenues exceeded budgeted revenues in 2014-15 and 2015-16 by an annual average of 18 percent. Village officials have not developed multiyear financial or capital plans or a fund balance policy. Finally, the Clerk-Treasurer did not provide the Board with adequate financial reports.

We found that case files were properly maintained with all supporting documentation including evidence of payment where applicable. Case files agreed to the Court's computerized case history report and were accurately reported to the Justice Court Fund. However, although collections were generally deposited intact, they were not deposited within 72 hours as required. They were deposited as late as 11 days after the date of receipt. In addition, while the clerks verified the deposits of collections using online banking, they did not perform bank reconciliations or accountability analyses and did not keep bank statements on file. Furthermore, Court personnel are unaware of the bail account balance. Finally, there were 26 checks signed using a signature stamp rather than signed by the Justice.