District officials purchased 18 buses for a total combined cost of approximately $1.6 million during our audit period. Before our audit fieldwork, the Business Manager did not submit an aid form to SED to claim transportation aid for any of these buses. We project the District is eligible to receive about $1.3 million of transportation aid for these bus purchases, based on the District's average State share ratio for transportation aid and deduction amounts. Had the aid forms been filed timely, the District could have received $920,300 of this aid from 2008-09 through 2016-17 to help offset the associated debt service costs for the buses. During our audit fieldwork, the Business Manager prepared and submitted separate aid forms to SED for five buses purchased from 2014-15 through 2016-17. On December 5, 2017, the Business Manager prepared and submitted aid forms to SED for the remaining 13 buses purchased from 2007-08 through 2013-14. The District received SED approval for transportation aid for 16 buses, and the remaining two buses are expected to be approved by SED in the near future. The District should receive approximately $1.3 million in transportation aid for the 18 buses over the next five years through 2021-22.

The Director has not established written procedures and, therefore, collection procedures differed at each collection point. As a result, cash was not always properly collected or deposited in a timely manner. For example, Library staff did not issue adequate receipts for all collections. Because the Director did not establish adequate procedures to accurately account for the inventory, sale and reconciliation of attraction tickets, Library staff did not properly account for attraction tickets purchased and sold. Finally, the account clerk performed incompatible financial duties.

The District did not apply for all transportation State aid for new bus acquisitions. We reviewed all nine of the District's new bus acquisitions during our audit period and found the District had submitted the proper forms to the State Education Department (SED) for two of the nine buses. The seven buses that were not reported to SED were acquired for a total combined cost of $647,196. As a result, the District was in danger of potentially losing $194,852 in State aid. In addition, club collections were not supported by adequate documentation and were not always deposited in the amounts received. The central treasurer made 31 disbursements totaling $39,134 without supporting documentation. These disbursements were for appropriate purposes. Student ledgers were not always accurate. Finally, sales tax was not collected or remitted.

District officials did not claim a total of $192,063 in costs for IEP-related services provided to Medicaid-eligible students during the audit period. Specifically, the District did not submit claims for reimbursable IEP-related services provided to the 10 students in our sample that could have generated revenue of $16,000 because the District did not obtain prescriptions, the service providers did not meet certain qualifications for reimbursement or the service provider did not provide the proper documentation for claiming reimbursement. In addition, the District did not obtain the parental consent required to bill Medicaid for 60 students who received IEP-related services, which would have resulted in revenue of $101,670. Finally, the District did not submit claims for reimbursable IEP-related services provided to 46 students because the services were provided by a therapist who did not have the licensing required to be eligible for Medicaid reimbursement. Had the District used a properly licensed therapist, it could have received $74,393 in revenue.

City officials accurately paid employees' salaries and wages. However, officials need to improve controls over payroll preparation and processing. There is no independent certification of payroll prior to the distribution of payroll checks. The City has delegated certain of the Comptroller's disbursement duties and custody of City funds to an outside payroll processing company without legal authority. City officials also need to improve controls over Community Activity Center cash receipts. City officials have not formalized policies and procedures over the Community Activity Center's cash collections. City officials could strengthen controls by ensuring individual accountability is maintained when cash is collected and changes possession.

District officials did not always obtain the necessary number of quotes as required by the procurement policy. In addition, when quotes were not obtained, officials did not document the reason for the action taken. We reviewed 39 purchases totaling $162,010. While District officials complied with the policy for 12 purchases totaling $84,966, officials did not seek multiple quotes for 27 purchases totaling $77,044. For example, District officials spent a total of $18,746 on vehicle repairs and maintenance from four different vendors during the audit period without obtaining the required quotes. We also found that the required number of quotes were not obtained for other purchases, including heating, ventilation and air conditioning maintenance ($9,610), uniform purchases ($6,466), air or oxygen tank refills ($5,333) and an upgraded surveillance system ($4,415). The District could pay more than necessary if District officials do not obtain quotes as required by the policy.

The Town of Hempstead Industrial Development Agency (TOHIDA) Board followed its procedures when approving the Green Acres project and provided timely and accurate information to District 30 concerning payments-in-lieu of taxes (PILOT) revenues. However, the TOHIDA Board had not developed policies and procedures assessing the indirect tax impact of PILOTs. Valley Stream Union Free School District 30 (District 30) officials underestimated PILOT revenue in the 2016-17 budget resulting in $1.8 million in excess revenue and an unnecessary increase to class 1 (residential) 2016-17 tax rates. In 2016-17, the class 1 tax rate increased $119.97 per $1,000 of assessed valuation (14.24 percent) to $962.61. However, the change to adjusted base proportions was greater in 2016-17. Additionally, the amount of property tax levied was higher than necessary due to the inaccurate PILOT estimate. We determined that had District 30 budgeted accurately for the Mall and Commons PILOTs, the class 1 tax rate would have been $920.15 per $1,000 of assessed valuation, or an increase of $77.51 (9.2 percent).

In April 2015 the Board created a new position of Chief Operating Officer (COO)/Deputy Superintendent and on July 1, 2015 appointed the former District Superintendent, whose salary and benefits were $143,656, to this position. At that time, the Deputy Superintendent position was vacant. Rather than hire a new Deputy Superintendent, the Board decided to combine the Deputy Superintendent's duties with those of the newly created position of COO/Deputy Superintendent, indicating it would achieve cost savings by doing so. The $305,677 salary and benefits for this new position were $71,063 more than the former Deputy Superintendent's salary and benefits of $234,614. The Board hired a new District Superintendent in June 2016 and paid her a salary and benefits of $141,085. By creating the COO/Deputy Superintendent position and then hiring a new District Superintendent, BOCES incurred total additional costs of approximately $69,000. This negates the Board's initial claim it would achieve costs savings by creating the new position and combining it with the Deputy Superintendent position. Further, upon her resignation, BOCES paid the former Superintendent 30 days of unused vacation totaling $14,223, although she did not leave BOCES employment. We also found questionable benefits provided to the COO/Deputy Superintendent. Since our last audit in 2010, BOCES has not implemented corrective action and has continued to retain $5.2 million in an other post-employment benefit accrual reserve that is not authorized by law, and a workers' compensation reserve for which there is a lack of clear statutory authority. Additionally, BOCES has inappropriately retained $2.2 million in reserves set aside for expenditures it consistently funds through annual operating costs. Further, in fiscal years 2014-15 and 2015-16, the Board allocated surpluses of $7.2 million to the capital fund without adequate transparency to the public and its component districts. As a result, BOCES has more than $14.6 million in restricted funds that should have been returned to component districts. BOCES spent $70,290 on conference and travel-related expenses for Board members and administrators in fiscal years 2013-14 and 2014-15. We question whether these expenses were for legitimate and necessary purposes. BOCES officials also did not adequately oversee and monitor a consultant hired to assist with the cooperative bid for electricity resulting in a missed opportunity to save component district residents as much as $492,817.

The Board needs to improve its controls over financial activities to properly account for and safeguard Company funds. The Board did not provide adequate oversight of Company financial affairs and the Treasurer did not provide the Board complete and accurate accounting reports. While the Board reviewed the Treasurer's reports, which listed the bills for review, when auditing claims it did not review the supporting documentation. As a result, the Board did not properly approve 572 disbursements totaling approximately $283,400. These disbursements were not shown on the Treasurer's reports and included three checks totaling $5,000 that were payable to or endorsed and cashed by the Treasurer. We also found that 155 claims totaling $12,890 were not supported by invoices or receipts to enable Company officials to identify the purpose for these payments. In addition, deposits for fundraisers totaled $45,096, but only $3,411 was documented in the Board minutes as being received. Finally, the Company's adopted budgets exceeded actual expenses by $36,860 in 2013 and $51,306 in 2014. These overestimated costs were passed directly to residents through the Town's budget.

Not all assets were not tagged as District property. New assets were not added to the inventory list. When assets are not properly tagged or added to inventory records timely, they are more susceptible to loss or theft and District officials do not have assurance that all property can be accounted for. In addition, the contractor-generated asset list did not correspond to District's Information Technology (IT) Department's asset list.

Because monthly bank reconciliations are incorrect and not reviewed for accuracy and monthly accountability analyses are not prepared, errors and irregularities occurred and remained undetected for several months or years. Specifically, unidentified funds of $1,963 have remained on deposit, disbursements did not match liabilities each month and interest earned has not been properly transferred to the Village. In addition, the bail bank account had a balance of $1,590 as of May 31, 2017, and Court officials could not determine the source of the funds. Finally, the Court did not properly record and deposit $1,400 in funds received during the audit period.

The Board and Village officials did not adequately segregate the code enforcement officer's (CEO) duties related to cash receipts, which resulted in the CEO performing incompatible duties, including collecting cash, recording receipts and preparing bank deposits. The Building Department did not always issue pre-numbered receipts. Money was not always remitted in a timely manner. Financial reports were not prepared and submitted to the Board.

The Council did not provide adequate oversight over the City's hydroelectric power operations. The Council did not adopt policies and procedures which adequately govern certain procurement practices, including requests for qualifications or proposals or energy performance contracts (EPCs). The Council also did not adopt formal long-term financial plans or develop adequate capital plans related to their hydroelectric power facilities. City officials and IT staff did not ensure compliance with the Council-adopted acceptable use policies. Computers are not regularly monitored or reviewed to ensure that all software installed served an appropriate business need and was legally obtained. Furthermore, administrative rights are granted on the majority of the City's computers. As a result, five of the 25 computers reviewed had nonbusiness appropriate software applications installed that included games, a browser rewards application, adware and multiple pre-installed entertainment applications. This may be exposing the City's computers to unnecessary risk, such as hacking or other malicious events.

The County overpaid municipalities $1.4 million in sales tax distributions from 2010 to 2016. In addition, the Clerk did not properly reconcile a County bank account for the Department of Motor Vehicles (DMV) resulting in an unaccounted for balance of $162,875. The Treasurer also did not properly reconcile the general fund bank account resulting in an unaccounted for balance $36,091. The adjusted bank balance in the sewer fund accounts had approximately $500 more than the general ledger cash balance.

The Board needs to improve its oversight of the claims process to make sure that transactions are accurate, properly supported and for legitimate purposes. During the audit period, the entire Board did not audit claims. Instead, the Director reviewed and initialed the claims then forwarded them to a Board-designated Trustee who audited all claims. The entire Board subsequently reviewed and approved the abstracts, which included a list and description of claims, the amounts claimed, the check date and number and vendor name. Any Trustee (other than the Trustee auditing the claims) could request to review individual claims, if there were questions about unfamiliar vendors or unusual claim amounts on the abstracts. After the Board approved the abstracts, the Treasurer signed the checks and paid the claims.

The Clerk collected approximately $4.9 million in real property taxes during the audit period, which were properly remitted to Fire District officials, the Supervisor and County Treasurer. However, our review of these collections disclosed that real property tax receipts totaling $1.9 million were not deposited within 24 hours of receiving these funds, with the longest timeframe between receipt and deposit of 21 days. We compared the date Clerk fees were received with the date they were deposited and found that 181 receipts totaling $16,861 were deposited more than three business days after exceeding the $250 threshold, with at least one deposit made 16 days late. We also identified $781 in fees, which the Clerk recorded and did not deposit. Finally, while the Board conducted an annual audit of Clerk records as required, its review was inadequate.

District officials accurately paid and provided benefits to employees in accordance with Board-approved contracts. We used a combination of manual and computer-assisted auditing techniques to review payroll records for all employees paid during the audit period and identify high-risk transactions. District officials established effective payroll-related policies and procedures by segregating duties and providing adequate oversight. We commend District officials for effectively designing and implementing policies and procedures that ensure the accuracy of compensation paid and benefits provided to employees.

The Board could improve its management of the Town's financial condition. Conservative budgeting practices have contributed to substantial operating surpluses. Therefore, the Town has accumulated excessive fund balances in both the townwide and town-outside-village general and highway funds. Although the Board appropriated portions of the accumulated fund balance as a financing source in the following year's budget, because of operating surpluses and accounting errors, the Town has not used appropriated fund balance as an actual financing source. The bookkeeper, as Budget Officer, inappropriately allocated sales tax revenue, resulting in taxpayer inequities and inaccurate accounting records which severely diminished the Board's ability to provide appropriate fiscal oversight. In addition, the Board has not adopted a multiyear financial plan to aid in the appropriate use and reduction of the Town's excess fund balance. Further, the Board has not performed or secured an adequate annual audit of the books and records of Town officials and employees who received or disbursed money. The Clerk's receipts and tax collections were not adequately safeguarded, increasing the risk of fraud and theft. The Clerk did not maintain a cash book to chronologically record all individual receipts on a daily basis and deposit all cash receipts intact or in a timely manner. Additionally, the Clerk did not remit taxes timely. Furthermore, the Clerk did not conduct a monthly accountability of cash with the amount in the bank and related liabilities. The Board was unaware of these inappropriate practices because they did not conduct an annual audit of the Clerk's records.

Student treasurers did not issue duplicate press-numbered receipts or prepare adequate accountabilities for all collections. When student treasurers do not maintain and submit adequate documentation to support collections, District officials cannot ensure that students are adequately accounting for all collections and remitting them to the central treasurer in a timely manner. The central treasurer made disbursements without adequate supporting documentation and proper documentation of approval. When payments are made without adequate supporting documentation, District officials cannot ensure that the disbursements are made for appropriate purposes. Finally, student treasurers did not maintain independent ledgers documenting collections and disbursements.

The Council did not adopt policies and City officials did not implement effective procedures for granting, revoking, modifying and monitoring access rights to the City's network and financial system. The Council also has not adopted adequate information technology (IT) security policies and City officials do not have formal procedures to address disaster recovery, disposal of electronic devices, data back up and password security management. The Council did not ensure cybersecurity awareness training was provided to personnel who use City IT resources.