Significant revenue and expenditure projections in the tentative budget are reasonable. The Village's budget includes $2.6 million for health and medical costs. However, we project the cost to be $2.7 million based on an average increase of 8 percent over the last five years. Therefore, the health insurance cost are underestimated by $100,000 in the 2018-19 tentative budget. The Village budgeted $4.2 million in water meter and sewer revenue. However, based on collections of water and sewer rents in prior years, we estimate the 2018-19 collections will be approximately $3.9 million, which is $359,000 less than budgeted. The Village faces potential increases in salary and wages for collective bargaining agreements (CBAs) that have expired and the possibility of retroactive increases when these agreements are settled. The tentative budget includes a tax levy of $11,016,788 which is $78,962 above the limit established by law. The Village Board should consider the potential financial impact of the settlement of the CBAs when finalizing the 2018-19 budget. In adopting the 2018-19 budget, the Village Board should be mindful of the legal requirement to maintain the tax levy increase to no more than the tax levy increase to no more than the tax levy limit as permitted by law, unless it properly overrides the tax levy limit.

The Board has not provided adequate oversight of water and sewer operations. The Board did not adopt written policies and procedures, adequately segregate the water and sewer billing and collection process, or implement mitigating controls. In addition, the Board-adopted fee schedule does not conform with the Village water code which requires the use of multipliers to base-rate charges for units with larger-diameter water lines. The Board also did not monitor water losses. We performed a reconciliation between the amount of water produced and billed quarterly by the Village from March 2016 through May 2017 and determined that an average of 35 percent of the water produced at the water plant is unaccounted for, or not billed. Based on quarterly averages for unaccounted-for water and the Department of Public Works Superintendent's calculation of the variable costs to produce 1,000 gallons of water, we estimate the production cost of the unaccounted-for water was approximately $12,900 annually. Finally, the Board has not developed a multiyear financial and capital plan.

The purpose of our audit was to determine whether town assessors were properly administering select real property tax exemptions for the period January 1, 2016 through December 31, 2016.

City officials need to improve their planning and monitoring of capital projects and the use of bond proceeds. Over the last five years, the City issued bonds totaling approximately $157.8 million for various capital projects and equipment. From fiscal years 2011-12 through 2015-16, the City has repeatedly borrowed without first exhausting prior bond proceeds. Overall, the City has issued bonds totaling $41.74 million for similar purposes, but only expended a total of $27.47 million. As a result, the City borrowed an excess of approximately $14.27 million as of fiscal year-end 2015-16. The City also issued bonds totaling $42.2 million over the last five years to pay for tax certiorari claims, a recurring expenditure that should be included in budgeted appropriations. Over the past five fiscal years, the City's annual debt service costs have increased by 18 percentage points and total indebtedness has increased by 10 percentage points. The Council and City officials also need to improve their budgeting practices and management of fund balance. City officials did not ensure accounting records were accurate, supported and complete and they did not consistently apply accounting principles or adequately account for financial transactions that affected the City's operations. Finally, City Council and officials have not provided adequate oversight of the City's financial operations. The Council and City officials have not established a fund balance policy. Quarterly financial reports do not provide Council with the resources to react to financial problems in a timely manner. The City does not have a long-term capital plan and the City's multiyear financial plan does not address eliminating debt issuances for recurring expenditures.

We compared the Town's operating funds budgeted revenues and appropriations with actual results of operations for the 2015 and 2016 fiscal years. We found the budgeted revenues and appropriations of the town-wide general fund for both years were reasonable as compared to the actual revenues and expenditures. However, the Board adopted unrealistic estimates of revenues and appropriations in the part-town general, part-town highway, sewer and water funds. For both 2015 and 2016, the Board also appropriated fund balance to fund appropriations in the part-town general, part-town highway, sewer and five of the six water districts. Due to the significant excess of actual revenues over the amounts budgeted and the actual expenditures being much less than appropriations, the amount of fund balance used to finance operations was much less than planned and, in some cases, none of the appropriated fund balance was used. As a result of the unrealistic budget estimates, the Board has not used appropriated fund balance to finance operations. This has resulted in the Town accumulating excessive fund balances in the part-town general fund, sewer fund and water districts 2,3,4 and 5. The fund balances in these funds increased by a combined $1,404,566 during 2015 and 2016. The Board did not develop and adopt a comprehensive, multiyear financial and capital plan. Such plans would be a useful tool for the Board to address the large fund balances in the Town's operating funds and to maintain a reasonable level of unexpended surplus funds at year-end.

District officials have not effectively managed fund balance. As a result, fund balance exceeded the statutory limit at the end of the past two fiscal years. While the reported unrestricted fund balance level at June 30, 2015 was within the statutory limit, the unrestricted fund balance levels at June 30, 2016 and 2017 exceeded the statutory limit by 2.94 percentage points and 6.73 percentage points, respectively. Additionally, the District accounted for certain proceeds in the general fund instead of the debt service fund, which caused the general fund balance to be overstated. However, even after making the adjustments for the proceeds, the unrestricted fund balance is still in excess of the statutory limit at the end of both the 2015-16 and 2016-17 fiscal years. The 2015-16 unrestricted fund balance is in excess of the limit by nearly 3 percentage points. Additionally, the unrestricted fund balance was over 5 percentage points in excess of the limit for 2016-17.

The Board does not request any financial information from the Clerk-Treasurer. Further, because the Clerk-Treasurer does not fully understand the accounting software, she cannot create accurate monthly budget-to-actual reports. During the budget development process, the Board reviews an expenditure summary created outside of the accounting software by the Mayor, adjusts appropriations based on this document and then adopts the budget. For fiscal years 2014-15 through 2016-17, the Board overestimated expenditures by an average of 15 percent. The Clerk-Treasurer does not provide the Board with historical budget-to-actual reports and does not inform the Board of expenditure lines needed throughout the year. For example, the Clerk-Treasurer recorded expenditures that were not approved in the 2015-16 adopted budget, including the Village's share of federal employment taxes and legal and professional fees totaling $13,000. Additionally, the Clerk-Treasurer filed inaccurate annual financial reports with OSC because she entered only the revenues and expenditures from the accounting software that had a corresponding code in the OSC software instead of all Village finances. For example, the 2017 annual financial report did not include utility expenditures totaling approximately $25,300. Finally, the Board does not perform the required annual audit of the Clerk-Treasurer's records and reports, further diminishing its ability to monitor the Village's financial operations.

Village officials have not set an appropriate tone for the protection of IT assets. Officials have not implemented appropriate policies and procedures to ensure IT assets and computerized data are properly safeguarded. The Village did not have written policies or procedures detailing the acceptable use of IT assets and the backing up of critical data. The Village also does not have a recovery plan or breach notification plan and has not provided adequate IT security training to employees. Consequently, there is an increased risk that productivity could be reduced, IT assets and information could be compromised and affected individuals may not be notified. In addition, the Village could suffer service interruptions and there could be a lack of individual accountability for various aspects of the IT environment.

The Board did not provide adequate oversight to ensure funding received by STE was appropriately used. It failed to develop clear and adequate policies and procedures or ensure that existing policies and procedures were followed. As a result of this weakened control environment, the former Director approved over $3,490 in credit card payments that did not have an invoice or receipt supporting the charge, and hired an employee in violation of Broome County Civil Service (BCCS) requirements at a starting salary that was $11,000 more than it should have been. Furthermore, the former Director and current Director did not provide the Board with comprehensive financial reports so it could properly oversee STE financial activities. Finally, the Board did not ensure that STE's goals aligned with those of the respective member counties. Because the Board failed to meet its fiduciary responsibilities, STE's financial operations is at higher risk of abuse or errors and the Board further jeopardizes its ability to foster economic development and improve the quality of life within the geographic region.

We reviewed the seven purchases totaling $261,439 that were required by policy to be competitively bid. We found that three purchases totaling $142,346 were not bid as required. District officials did not obtain bids for general insurance coverage in 2016 totaling $43,129 and 2017 totaling $38,138, and obtained quotes instead soliciting competitive bids for parking lot paving and concrete curbing totaling $61,080. The remaining four purchases, totaling $119,093, were purchased from valid State and County contracts. We also reviewed the 32 purchases totaling $163,885 that, in accordance with the policy required District officials to obtain two or three verbal or written quotes. Officials could provide no evidence of quotes for 28 purchases totaling $134,579. For the remaining four purchases totaling $29,306 for firefighting gear ($15,855), parking lot sealing ($7,000), fuel ($3,346) and firefighter jackets ($3,105), District officials used State and County contracts. We reviewed the seven purchases totaling $261,439 that were required by policy to be competitively bid. We found that three purchases totaling $142,346 were not bid as required. District officials did not obtain bids for general insurance coverage in 2016 totaling $43,129 and 2017 totaling $38,138, and obtained quotes instead soliciting competitive bids for parking lot paving and concrete curbing totaling $61,080. The remaining four purchases, totaling $119,093, were purchased from valid State and County contracts. We also reviewed the 32 purchases totaling $163,885 that, in accordance with the policy required District officials to obtain two or three verbal or written quotes. Officials could provide no evidence of quotes for 28 purchases totaling $134,579. For the remaining four purchases totaling $29,306 for firefighting gear ($15,855), parking lot sealing ($7,000), fuel ($3,346) and firefighter jackets ($3,105), District officials used State and County contracts.

City officials did not properly monitor Business Improvement District (BID) financial operations. The Council did not enter into a written agreement with the district management association (DMA) or monitor the manner in which the DMA used BID funds. City officials allowed the DMA to use BID funds at its own discretion with little oversight. City officials did not maintain adequate records to properly account for BID funds. The BID charges were not used in a transparent manner. BID charges exceeded the statutory limit for 11 of the past 13 years by a total of approximately $464,000 or an average of $42,000 each year.

Village officials accurately paid gross salaries and wages to employees. However, the Board did not segregate the Clerk-Treasurer's payroll processing duties and did not establish adequate compensating controls to oversee payroll processing. Even though the Mayor reviews the payrolls, he does not review supporting documentation including time records, bank statements, direct deposit listings or cancelled checks. In addition, all employees did not complete detailed time records and supervisors did not always approve time records. The Clerk-Treasurer credited two employees a total of 10 vacation days before they were earned.

We found that the significant revenue and expenditure projections in the proposed budget are reasonable. This budget review did not contain any recommendations.

The Authority did not establish a formal process or procedures for reviewing penalties on water and sewer bills. The Authority does have an informal process for account adjustments. However, these procedures are not formally documented, and the Authority does not require that all account adjustments be reviewed periodically for appropriateness. The Authority's unaccounted-for water in 2016 totaled 195 million gallons (19.7 percent). Based on the Authority's average cost paid to purchase water from all suppliers during the year, the unaccounted-for water in 2016 resulted in an approximate $404,000 cost to the Authority for which no benefit was received. This exceeded the Environmental Protection Agency's 10 percent goal by 95,963,000 gallons (almost 10 percentage points), costing over $198,643. The Board last updated its computer and Internet use policy in 2011. However, we found that Authority employees do not adhere to this policy and Authority officials do not enforce adherence to it. Some employees use the Internet during working hours to engage in questionable activities that put the Authority's systems at risk. Authority officials also have not provided employees with cybersecurity awareness training. In addition, the Authority's IT vendor does not provide education or training as part of its services to the Authority. Finally, the Authority does not prohibit its third-party vendors from disclosing information about the Authority's water and wastewater systems. The service level agreements between the Authority and its vendors do not contain terms specific to information disclosure, and officials do not periodically review publicly available content for inappropriate disclosure.

The Board and District officials have not effectively managed fund balance. Unrestricted fund balance increased from $9.5 million as of June 30, 2014 to $18.3 million as of June 30, 2016. Unrestricted fund balance was 62 percent of 2016-17 budgeted appropriations and exceeded the statutory limit by $17 million (58 percentage points). While the vast majority of accumulated fund balance resulted from retroactive aid payments from the State and payments from the federal government which were outside the District's control, even without these payments, unrestricted fund balance would have exceeded the legal limit as of June 30, 2016 by approximately $5 million, or 17 percentage points. The Board and District officials also have not effectively managed four reserve funds with balances totaling approximately $4.1 million. We also found that employee salary step information was not clearly identified in a prior Collective Bargaining Agreement (CBA). As a result, it was not clear what the proper salary step placement was, at the time of the agreement, for three employees in our audit sample. The Board also has not adopted written policies and District officials have not developed written procedures formalizing controls and oversight associated with the payroll function. We found no discrepancies with four separation payments totaling $41,525 paid to former employees.

The Board did not provide adequate direction for staff to follow when determining employee compensation and allowed the former Superintendent to establish employee compensation without adequate oversight. School officials told us that before the collective bargaining agreement was ratified, the former Superintendent (who resigned in April 2017) determined annual salaries and other compensation including any stipends for all employees. He provided the clerk with a computerized spreadsheet, which listed the salary or hourly pay rate for each employee. The clerk used this spreadsheet's information to enter the pay rates into the computerized payroll system, but did not print or retain a secure version of the original spreadsheet. The former Superintendent did not document decisions in the employees' personnel files and employees were not provided with annual salary notices or written documentation of their salaries for the upcoming fiscal year.

The Board has not adopted a procurement policy and Library officials told us they do not require competitive quotes for purchases. However, the Library belongs to the Pioneer Library System, which facilitates decision-making on the management of library collections and coordinates purchasing of books. Between January 1, 2016 and November 20, 2017, the Library paid 389 claims and/or vouchers totaling $129,320, of which 227 totaling $67,854 were for payroll, utilities and service contracts. Our review of the remaining 162 claims found none were subject to competitive bidding and that the only aggregate purchases in excess of $500 were for books and resource materials purchased through the Pioneer System. While the purchases during our audit were minor, the lack of a procurement policy and procedures to address price comparisons increases the risk of the Library acquiring goods and services at higher costs than necessary if larger purchases are made in the future.

District officials accumulated unrestricted fund balance of approximately $4.8 million or 15.6 percent of the 2017-18 budgeted appropriations and exceeded the statutory limit by about 11.6 percentage points. Officials need to improve budgeting practices to more effectively manage fund balance. While officials appropriated fund balance annually from 2014-15 through 2016-17 to finance operations, these amounts were not used to finance operations because of overly conservative expenditure estimates. The Board and District officials have not developed formal, written multiyear financial or capital plans. The Board and District officials did not adopt and implement procedures governing the operations of extra-classroom activities (ECA) funds, as required, for the 32 clubs with total cash balances of $103,571 as of June 30, 2017. As a result, the central treasurer, faculty auditor and faculty advisors were not provided with guidelines to properly account for and oversee ECA clubs. Officials were unaware the central treasurer and the student treasurer did not maintain separate independent records to properly record and account for all cash collections and disbursements for each ECA.

Significant revenue and expenditure projections in the proposed budget are reasonable. While the County budgeted $544.5 million in revenue for sales tax collections, we estimate total collections to be closer to $538.4 million. The County budgeted $246.6 million in State aid revenue, which may be overestimated. Four of the County's collective bargaining agreements (CBAs) have expired and the County faces potential significant increased salary and wage costs when these agreements are settled. The County's adopted budget includes a tax levy of $705,565,775, which is within the limits established by the law. Monitor sales tax and State aid revenues throughout the fiscal year and make any needed budget amendments if revenues fall short of estimates. Consider the potential financial impact of the settlement of the expired CBAs and be prepared to provide the necessary funding in the event that any are settled in 2018.

The Board did not adopt policies and procedures for acceptable computer use and granting, revoking, modifying and monitoring individual access rights to the networks through Active Directory. In addition, the Board has not adopted a comprehensive disaster recovery plan or policies and procedures for password security management. The Board also has not implemented a process to address the deactivation of user accounts. The Authority's Active Directory has 19 network user accounts, seven (37 percent) of which are inactive. In addition, the Board did not provide users with security awareness training to help ensure they understand security measures necessary to protect the network. Authority officials did not ensure that the server was in a secure location and did not maintain an inventory of its software. Finally, three employees use the Authority's financial application and share one user account.