While the City's budgets were realistic, general fund budgets for the period reviewed were not structurally balanced. Specifically, although variances between budgets and actual results for 2016 were within 4 percent for each operating fund, the City's general fund continually relied on a $300,000 annual fund balance appropriation to finance operations. Furthermore, overestimated revenues contributed to the use of more fund balance than the budget appropriated. Because of the revenue shortfalls, the City issued a $1 million revenue anticipation note (RAN) in November 2016. The City's fund balance declined during fiscal years 2014 through 2016 for each of the operating funds, and the sewer fund had a deficit fund balance at the end of all three years. The Director did not provide budget-to-actual reports to the Council on a regular basis; rather, he provided reports upon request. Although the Mayor had access to the City's financial software, there was no support to demonstrate how frequently the Council reviewed and analyzed budget-to-actual reports. The City also lacked multiyear plans. Finally, the City's accounting records did not agree with the annual financial reports.

District officials did not use a formal timekeeping system, instead they relied on the Manager's observations of employees' time worked. Officials did not maintain time records for the Treasurer's or Secretary's time worked. For all other full-time employees, the Manager kept a handwritten diary that included, among other information, his observations of when employees started and ended work each day, worked overtime or used accrued leave. When the Manager was not at work, no other District official maintained this diary. Additionally, time worked by part-time dispatchers was based on the time each dispatcher logged into the dispatching software. The end of a dispatcher's shift was calculated when the next assigned dispatcher logged into the software and was not necessarily when the previous dispatcher left work.

The Board has not developed or implemented any parking ticket collection policies. Although Village officials implemented procedures for collecting parking fines, the procedures are limited to the contractor sending five delinquency notices and reporting non-payers to the Department of Motor Vehicles. As a result, the number of unpaid parking tickets more than doubled, from 1,637 in 2012 to 3,256 in 2016. The Board has not developed benchmarks and the agreement with the contractor does not include a performance benchmark. The Village parking ticket collection rate was approximately 84.2 percent through the end of our audit period. Despite this level of collection, the Village still has approximately $1.8 million in cumulative unpaid parking tickets outstanding as of September 30, 2017, including 31,870 tickets that remain outstanding from before January 1, 2012 with associated fines and penalties totaling more than $660,000. These tickets remained on the contractor's report of unpaid parking tickets and no additional actions were taken to collect these amounts.

The Board did not provide oversight or ensure the Treasurer's duties were adequately segregated or monitored. The Treasurer's duties related to cash receipts and disbursements were not adequately segregated, which resulted in the Treasurer performing incompatible duties such as collecting cash, recording receipts, writing checks and preparing bank deposits. The Treasurer did not maintain accurate accounting records or prepare and provide the Board with monthly financial reports. Company members voted on a resolution which established how the Company would use the foreign fire insurance funds. The Board has not implemented procedures to address the review of claims or outlined the documentation that should accompany a purchase. Although the disbursements tested appeared to be for legitimate Company purposes, there were a significant number of disbursements that did not have documentation to substantiate their legitimacy. Further, the Treasurer stated that an annual audit has not been performed.

The Department has 14 bank accounts covering Department, emergency squad, bingo and bell jar operations. Records for the bingo and bell jar accounts are maintained by their respective Treasurers and list all disbursements and receipts. However, the Department Treasurer does not maintain complete accounting records of disbursements and receipts or running cash balances for the Department and squad accounts. In addition, bank accounts are not reconciled and reported to the membership. Instead, the Treasurer reports unreconciled cash balances from the bank statements for the Department and squad accounts and does not include receipts and disbursements. Furthermore, the Treasurer's report does not include bingo or bell jar activity. The Department generally had controls to safeguard cash receipts by limiting access to cash and reconciling cash to reported counts and paid bell jar tickets. However, the cash collected from bingo sales is not dual counted or reconciled to bingo sales prior to deposit. Finally, the audit and approval of bills was not properly documented.

The County's financial condition has been deteriorating for the last several years. This occurred because of planned operating deficits and expenditures outpacing revenues, which ultimately consumed fund balance. As of December 31, 2016, fund balance in the general fund was 2.7 percent of 2016 gross expenditures, which was among the lowest for counties in the State. At this rate, the County's current and future results of operations must be precisely as budgeted (or better) and spending monitored to stay within budget, or fund balance may be depleted at the end of 2017.

The Sheriff's Department did not properly account for and manage the inmate and commissary accounts. The former Sheriff improperly transferred approximately $33,800 from the inmate bank account to the civil bank account. Additionally, the former secretary did not periodically account for and deposit all commissary surcharges in the separate commissary bank account as required and instead issued a check from the inmate account totaling approximately $23,900 in November 2015 to apparently correct for the previously unmade transfers to the commissary account. The former Sheriff did not review the bank reconciliations prepared by the secretary and neither the former nor the current Sheriff prepared monthly accountabilities for the inmate and the commissary accounts to reconcile the bank account balances with the outstanding liabilities (e.g., money owed to inmates or vendors). We also performed an accountability for the inmate account and found that as of February 28, 2017, the Department had approximately $5,400 more in this account than the known amounts owed. Further, Department officials incorrectly made disbursements from the inmate account for shared expenditures, such as cable bills, and made disbursements, such as personal inmate telephone charges, from the commissary account.

District officials have effectively ensured the accuracy of employee salaries and wages paid by instituting comprehensive practices for processing and verifying payroll payments. However, we found instances where District staff made incorrect contributions to employee 403(b) accounts and made errors calculating the employee/retiree share of health and dental premiums. The District paid $114 more for 403(b) matching contributions for 14 employees during a sample pay period we tested in December 2016. Over 20 pay periods in the year, this could result in $2,270 of District overpayments for 2016-17. The District also contributed about $55 too little for seven administrators during the December 2016 pay period we tested. Over 20 pay periods, this could amount to $1,091 in District underpayments for 2016-17. In addition, we found errors with health and dental insurance contributions totaling $628.

The County has adopted a procurement policy that includes the bidding requirements of General Municipal Law (GML) and procedures for goods and services GML does not require to be competitively bid. The County procured goods and services in accordance with GML and the County's procurement policy. We commend County officials for effectively managing the procurement process.

While District financial activity was properly recorded and disbursements were authorized, the Board needs to improve its oversight of the Treasurer's financial duties. The Treasurer performed all financial duties including receiving and disbursing cash, signing District checks, conducting bank transfers, maintaining the accounting records and preparing bank reconciliations with little or no oversight. The Board reviewed a monthly report prepared by the Treasurer, which includes the previous month's balance for each bank account, internal bank to bank transfers, interest earned, revenues collected, claims paid and ending bank balance. However, the Board did not request monthly financial reports, such as budget-to-actual revenue and expenditure status reports, trial balance reports, bank reconciliations, bank statements or canceled checks to review, which could serve as a tool for the Board to perform oversight duties. The Board also did not ensure that all claims were adequately supported, properly authorized and for valid purposes. Finally, the Board also did not annually audit the Treasurer's records.

The Village's general fund balance decreased from $859,588 to $379,387 from 2013 to 2017. The general fund balance was reduced primarily by interfund transfers from 2014 through 2016 to the sewer fund totaling $400,000. The Board also appropriated fund balance in 2014 and 2016 to help finance operations. The Board has not developed a comprehensive fund balance policy, which would establish clear guidelines for fund balance levels, as well as appropriate usage of fund balances. Without reasonable fund balance levels, the Village may not have adequate cash flow to meet Village needs. In addition, from 2014 through 2017, the total short-term debt remained consistent at approximately $2.5 million annually, approximately 32 percent of the total budget. In fiscal year 2017, the total short-term debt increased to nearly $3.4 million. Total debt (long and short-term) increased to over $5.2 million. A heavy or ongoing reliance on debt could indicate the Village has cash flow issues that are not being resolved. Finally, the Board does not have a comprehensive multiyear financial plan. Such a plan can be a valuable resource for the Board and officials and would allow them to make more informed financial decisions.

We reviewed 51 cash disbursements totaling $180,851 and found that they were generally supported by adequate documentation and appeared to be for proper School purposes. However, the Board did not ensure that the policies and procedures in the charter and bylaws were followed and at times allowed the Board Chair to control all aspects of the disbursement and purchasing processes. We also reviewed 48 purchases totaling $1.9 million and found that School officials did not seek competition for 39 purchases totaling $1.2 million. As a result, there is an increased risk that errors or irregularities could occur and that taxpayer dollars may not be expended in the most efficient manner.

As of July 31, 2017, the District reported four general fund reserve funds (health insurance, tax certiorari, employee benefit accrued liability and unemployment) with balances totaling approximately $10 million. The District was authorized to establish the health insurance reserve fund pursuant to a special act of the State Legislature and the Board has adopted a written policy for the health insurance reserve that addresses its purpose, optimal funding level, the conditions under which the reserve will be used and required periodic analysis. However, it has not adopted any policies for the other reserve funds. We analyzed the balances in each of these reserves and found the balances to be reasonable with the exception of the tax certiorari reserve. As of July 31, 2017 the tax certiorari reserve was overfunded by $4,547,927.

The Superintendent of Public Works and the Sheriff did not always procure goods and services in accordance with GML. We reviewed 35 purchase and public works contracts totaling nearly $6 million that the County entered into during our audit period that exceeded the competitive bidding thresholds to determine whether they were procured in accordance with GML. We found six purchase and public works contracts totaling $272,115 were not competitively bid as required. In addition, Department heads and/or their designee did not always ensure copies of purchase and public works contracts were on file or compared these contracts to the vendor invoices to ensure that the purchases are made in accordance with either the County's bid award documentation or when using contracts bid by other governments. For example, of the 35 purchase and public works contracts reviewed, we found three purchases from different vendors who overcharged the County a total of $11,343. County officials also did not always obtain quotations and bids in accordance with the County's policy. Finally, County officials did not always solicit competition for professional services. We reviewed the County's procurement of services from 10 professional service providers who were each paid in excess of $5,000 for a total of $1.5 million to determine whether their services were procured using RFPs. The County did not use RFPs to procure the services provided from nine of the professional service providers who were paid $1.05 million during our audit period, including $651,452 paid for insurance coverage in 2017 which was after the County's purchasing policy was revised in 2016.

The Board has not established policies and procedures to ensure that cash receipts are properly and adequately safeguarded. As a result, there is a lack of segregation of duties and supervisory review for the Clerk/Tax Collector's cash receipts. The Clerk/Tax Collector did not routinely issue duplicate receipts for Clerk's fees or record daily receipts in the check register. She also did not make deposits totaling $11,066 in a timely manner or in the same form (i.e., cash or check) as received; we found discrepancies totaling $11,680 between the cash receipts form shown in the Clerk's records and the bank deposit slips for 2016. Also, the Clerk/Tax Collector did not deposit 100 percent of tax collections or remit tax collections totaling $2,794,760 to the Supervisor in a timely manner. In addition, the Supervisor's monthly reports were inaccurate and the Code Enforcement Officer (CEO) did not ensure all building permit fees were properly calculated and supported or issue receipts for all building permit collections. Finally, the Board did not perform annual audits of the records and reports of officers and employees. Had the Board performed annual audits, it may have identified the inaccuracies in the Clerk/Tax Collector's records and the Supervisor's monthly reports that increase the risk of errors, fraud or misuse of assets occurring and remaining undetected.

The Board should improve its oversight of Town operations. The Town accumulated significant fund balance in the general and highway town-wide funds without clear plans to use this money. Town officials have not developed a fund balance policy, established any reserve funds or developed formal long-term capital or financial plans. As a result, the Board may have unnecessarily raised real property taxes. Furthermore, the Board and Supervisor did not establish and implement necessary controls over the disbursement process to safeguard Town money.

The Department established effective procedures to authorize and audit vendor claims. To ensure vendor compliance, the County adopted a corporate compliance program which included standards of conduct and a dedicated 24-hour hotline to report violations. All contracts contained terms for corporate compliance, holding providers to all County, federal, State and local laws, rules and regulations. Department procedures also require several levels of review and approval before a claim is paid. If claim documentation is inadequate, it is sent back for additional information and the entire approval process restarts. The Department's procedures will delay or stop payments of claims when the vendor provides inadequate documentation. We commend County officials for establishing an effective claims processing system and procedures.

The District employs a Head Custodian who oversees 16 custodial staff. The Head Custodian told us that he reviews the hours worked on time records. However, he did not sign-off on this review. In addition, he does not preapprove in writing overtime hours to be worked for custodial staff. While the overtime payments included in our gross pay review appeared to be reasonable, without these controls, there is an increased risk that the District could be paying for more hours than were actually worked or incurring higher overtime costs than necessary.

The Board did not provide adequate oversight for financial activities. The Board did not include in its bylaws, or adopt, policies and procedures for cash receipts and fundraising activities. Additionally, the Board did not establish a code of ethics or annually audit the Treasurer's records. Therefore, we verified that all deposits were recorded in the monthly Treasurer's reports. We also reviewed cash receipts relating to the Company's two fundraising events during 2016. The Company raised almost $60,000 from a tractor/truck pull and a raffle, where food and beverages were also sold. The Treasurer did not maintain detailed financial records for the fundraising events. Although a portion of the raffle money was misclassified as tractor/truck pull money, it appears that the total revenues were reasonable and that all fundraising revenues reported to the membership were deposited.

The Board and Town officials did not act in full compliance with relevant State statutes that govern the issuance of municipal debt. As a result they did not properly plan for the financing of capital projects. Had they better managed the finances of these projects, the Town could have saved approximately $10,200 in issuance costs related to the bonds and approximately $19,200 in annual interest on debt. Also, the Board did not adopt a bond resolution before issuing a BAN and the Town did not restrict unexpended BAN proceeds to repay the related outstanding debt. Finally, the cash balance in the sewer construction capital projects fund as of December 31, 2016 was approximately $130,000. Town officials were unsure of the source of some of the cash balance. A capital projects fund should not be used to account for excess cash.