The Board should adopt a policy to establish the level of fund balance to be maintained in each fund and create long-term plans that set forth the Town's financial objectives and goals. The general fund's total fund balance has grown over the last three completed fiscal years from $293,474 in 2013 to $525,265 in 2015, or approximately 351 percent of the 2016 budgeted appropriations. Additionally, the highway fund's total fund balance has remained relatively unchanged for the past three years with an ending balance of $171,950 in 2015, or approximately 57 percent of the subsequent year's budgeted appropriations. This occurred because of continued operating surpluses from conservative budgeting practices over the last three completed fiscal years and because there was no established plan for the use of the excessive fund balance. In addition, although the Board audits claims for payment and the former and acting Supervisor signed the checks, the bookkeeper maintains custody of the bank statements, prepares the checks and abstracts, records all transactions and performs the bank reconciliations without any additional oversight. Neither of the Supervisors nor the Board were aware of the risks of not providing adequate oversight of the bookkeeper's work. Furthermore, the Board did not know it was required to annually audit the Supervisor's records.

The Assessor did not properly grant and monitor property tax exemptions. As a result, property tax reductions totaling $13,176 were granted to the owners of four properties that were not supported with documentation. Additionally, the Assessor did not properly file RP-520/551 forms for four of eight new property owners who received property tax reductions to which they were not entitled. As a result, there is an increased risk that other property owners may be paying more or less property taxes than they should.

The Board did not approve contracts with the School's management company and IT consultant and did not audit claims for these services. Additionally, the Board did not ensure that the management company provided abstracts (detailed lists of claims) in its monthly reports to clearly identify $1.9 million in payments made to the company and IT consultant. As a result, the School paid $950,631 to the management company for management fees and $193,221 to the IT consultant without Board approval. Moreover, the Board did not review or approve claims totaling $1.9 million. Because the Board does not provide adequate oversight of financial activities, it is limited in its ability to ensure School funds are appropriately spent.

School officials did not comply with the Board-adopted Financial Policies and Procedure Manual (policy). Payroll records for all of the employees that we reviewed for the 2013-14 school year did not have a Personnel Action Form (Form) and 13 of them did not have offer letters on file as required by the School's policy. Of the 34 employees that had offer letters in their files, four were cumulatively overpaid by $1,528 and one was underpaid by $429. In addition, the Board did not establish clear policies and procedures for the accrual and use of leave time. As a result, five of the six administrative staff took more vacation time off than the 10 days allowed by the School's policy. Furthermore, we found that all employees' beginning balances of personal leave were in excess of the three days allowed, resulting in an additional cost to the School.

The Justice ensured that Court money collected was accurately recorded and deposited. He reported money collected accurately and completely to the Justice Court Fund and the Supervisor and prepared accurate monthly accountabilities of Court funds. However, the Justice did not refer all eligible traffic tickets to the New York State Department of Motor Vehicles to ensure that all money was completely collected. Additionally, although the Justice provided the Board with annual reports of the Court's financial activities, the Board accepted these records and did not ensure that an annual audit of the Justice's records and reports was conducted.

District officials generally ensured that leave accruals were properly recorded. However, we found supervisors did not verify that leave accrual balances were available prior to approving leave requests because they did not have access to current leave balance data for employees. Additionally, because there were no periodic reviews of leave accrual records and balances, input errors may not be detected and corrected in a timely manner.

The Board did not adequately oversee the Town's financial operations. Poor oversight has contributed to the Town having incomplete and inaccurate accounting records. This has resulted in at least $29,540 in inequities because residents living inside the Village contributed to funding expenditures that should have only been funded by residents living outside the Village. Town officials also made purchases totaling $288,819 from three vendors without complying with the competitive bidding requirements or using State contracts. In addition, the Board entered into three installment purchase contracts totaling $377,743 to finance equipment purchases without evaluating financing alternatives. The Board also did not have adequate procedures for auditing claims. Consequently, corresponding claims were never presented to the Board for its audit and approval for 19 of the 119 check disbursements reviewed (16 percent) totaling $10,382. In addition, eight claims included payments totaling $6,003 to the Highway Superintendent for mileage reimbursements for personal use of his vehicle during 2015, although he did not maintain or submit any documentation (e.g., mileage logs) for the 11,544 miles that he was reimbursed. The Justices did not establish adequate controls over collections. Consequently, collections were not properly accounted for or deposited in a timely manner. In addition, bank reconciliations and accountability analyses were not performed for all Court bank accounts. As a result, Justice Durant and the Court clerk were unaware that, as of April 30, 2016, Justice Durant had a cash shortage of $172 and, when she left office, Justice Pelkey had a cash shortage of $108. In addition, the Justices did not establish policies and procedures for enforcing unresolved traffic tickets, which resulted in unpaid traffic tickets not being enforced and potential lost revenue to the Town.

The Department generally recorded and deposited cash receipts properly, but did not remit money to the Supervisor in a timely manner. The Director did not reconcile recreation fees collected by a vendor with cash receipts records. The Director also did not ensure that Department personnel always issue a press numbered duplicate receipt or consistently comply with the credit/refund policy. This occurred because the Board did not provide adequate oversight of Department financial activity. The Board did not adopt written policies over financial operations or approve a key Department contract. As a result, the Department is at risk of errors and omissions going undetected.

The Board could improve its management of the Town's financial condition. The Board provides adequate oversight of Town operations through its bimonthly claims audit, quarterly Town finance review and annual audits of all departments receiving and disbursing money. Additionally, Town officials have replacement schedules for the roads and the Town's buildings and equipment appear to be in a good condition. However, conservative budgeting practices have contributed to substantial fund balance levels and the Town has no policies or procedures in place to ensure reasonable levels are maintained and residents are not unnecessarily burdened with taxes.

Town officials have not identified and corrected all IT deficiencies. Town officials have sufficiently addressed some areas such as IT service contracts, anti-virus protection, patch management, online banking, wireless networks and physical controls. However, we found improvement opportunities in areas such as IT policies, security awareness training, computer hardware inventories and contingency planning. Implementing these improvements will reduce the risk that data, hardware and software systems may be lost or damaged or that Town operations will be interrupted.

The Board did not audit all claims before approving payments or adopt a resolution allowing eligible claims to be paid in advance of audit. Furthermore, the Supervisor paid 13 claims totaling approximately $8,300 before the Board audit. Finally, the Board approved 22 claims totaling approximately $39,000 that did not contain sufficient documentation to determine whether the amounts paid were for legitimate Town purposes. We reviewed other available evidence and determined that these claims were for legitimate Town goods and services.

The Supervisor did not maintain sufficient, complete and accurate accounting records. He maintained two accounting systems for the Town's funds that were not set up to properly account for transactions by individual funds; and the two systems did not match one another. Consequently, the Supervisor was precluded from preparing accurate, periodic reports to the Board and from filing the past two annual financial reports. Furthermore, the Board has not conducted an annual audit of the Supervisor's records for several years. Without timely up-to-date financial information, the Board was unable to adequately monitor and manage the Town's financial operations and was unaware that the Town had accumulated significant fund balances in its two major funds. We project that at the end of 2016, the highway and general fund balances were higher than necessary. The general fund balance was approximately $975,000, or 372 percent of the ensuing year's budgeted appropriations, and the highway fund balance was approximately $786,000, or 117 percent of the ensuing year's budgeted appropriations.

The Justices provided oversight of Court activity; however, they could improve their oversight to further safeguard Court money. We sampled 42 various Court transactions and determined that they were properly accounted for because these transactions were recorded as the Justices adjudicated and the associated Court money was deposited and reported to the Justice Court Fund. We also tested 13 disbursements and found that, although they were properly disbursed to appropriate parties, the Justices allow the Clerk Manager to sign all disbursement checks. One Justice explained his time constraints would make it difficult to sign all the checks in a timely manner given the large volume of returned bail each month. However, if the Justices signed the checks it could serve as a preventative control and further improve their current oversight of disbursements.

The Board has not adopted policies to sufficiently protect the Town's information technology (IT) assets and did not ensure that the adopted acceptable use policy was enforced or monitored. We found that users were able to make changes, additions, deletions and adjustments without authorization or subsequent review. Town officials did not effectively manage software and licenses. The Board did not ensure that the Town had adequate written agreements with the IT service provided or bank used for online banking. Further, Town officials did not adequately segregate online banking duties and did not dedicate a separate computer for online transactions to limit access to online bank accounts. In addition, we found that the Board did not adopt an IT disaster recovery plan. The Board has not adopted a comprehensive multiyear financial and capital plan or an adequate fund balance policy. While the Board adopted a fund balance policy that set the reasonable amount of fund balance in the town-wide (TW) and town-outside-village (TOV) general and highway funds at 15 to 20 percent of the ensuing year appropriations, the policy did not establish any guidelines for the other funds, such as the sewer and water funds. Further, the Board did not ensure that the fund balance policy was followed. As a result, the Town accumulated excessive fund balance in the TW, TOV, sewer and water funds. As of December 31, 2016, the TW, TOV, sewer and water funds had unrestricted fund balances that were 55, 57, 107 and 153 percent of ensuing year appropriations.

Driving range fees were not remitted to the Town Comptroller’s office in a timely fashion, and no one independent of the Director of the Department of Parks and Recreation reconciled the daily sales logs to his annual report of driving range fees.

The Town did not accurately maintain employees' leave accrual records. The maintenance of leave accrual records during the 2015 fiscal year was decentralized. Multiple employees were responsible for manually accounting for employees' leave accruals with no oversight. The Secretary to the Supervisor maintained leave accrual records for the landfill attendant and for herself; the highway foreman maintained them for the Highway Department employees; and the Assessor and landfill supervisor maintained their own. In addition, the bookkeeper, who was responsible for processing payroll, was not provided with the leave accrual records maintained by these employees. As a result, the bookkeeper could not know whether employees had sufficient leave time available prior to being paid for it. Additionally, Town officials were not aware that the leave accrual records maintained by the landfill supervisor for himself were inadequate. The records did not include any information for sick and personal leave, but only for vacation leave; and the vacation leave records – while including the leave time that was earned and the total amount used each year – did not include starting leave accrual balances or the dates that leave was used. In total, as of September 30, 2016, six employees' leave accrual balances were overstated by 712.75 hours valued at $12,207 and understated by 14.75 hours valued at $231.

The Town did not seek competition to procure goods and services totaling approximately $268,000 and did not have a current contract with the IT consultant. When purchases are made without a competitive purchasing process, there is the risk that goods and services were not purchased at the best prices and were not obtained prudently. Further, without adequate written contracts, neither party has a clear means of determining the basis for compensation. Although Town officials contracted with a consultant for IT services, they did not develop a disaster recovery plan, or establish controls to prevent employees from installing games or visiting social networking websites. We tested seven of the Town's 27 computers and found that multiple game programs had been downloaded onto them. These games can potentially possess spyware and may cause a denial of service through an application crash. In addition, we identified questionable Internet use by Town employees including visiting websites for online banking and investment, shopping, travel, sports, social networking and entertainment. Employees also performed other Internet research and browsing of a personal nature using the Town's computers. One computer had numerous instances of inappropriate website access, including personals (dating), solicitation of various sexual acts and pornography. As a result, the computer system and data are at risk of loss and damage. Employees' inappropriate use of Town computers also results in lost productivity.

The Board and Supervisor should improve their management of the Town's fund balances. The Town has accumulated fund balance totaling $358,706 in the general fund and $515,112 in the highway fund without clear plans for the use of these accumulated funds. Town officials have identified potential uses for the funds including needed repairs at the highway garage or road improvements, but have not developed financial plans to address these needs. In addition, Town officials have not planned for the Town's established reserves to fund these needs.

The Board did not provide adequate oversight of Town purchases to ensure the prudent and economical use of its residents' money. While Town officials generally competitively bid and utilized New York State Office of General Services (OGS) or county contracts where appropriate, they did not seek competition for professional services and did not obtain the proper number of quotes for purchases subject to their policy. As a result, there is a heightened risk that purchases were not at the lowest cost to the Town residents. Furthermore, we found the Town could have saved over $6,000 if they had purchased heating oil and road sand through the available OGS and county contracts.

While Town officials effectively managed town-wide fund balances, they could improve their management of town-outside-village (TOV) fund balances. The Town has accumulated fund balance in the general and highway TOV funds without clear plans to use these moneys. More specifically, Town officials have not developed a fund balance policy, nor have they established any reserves or developed formal long-term capital or financial plans. As a result, the Board may have raised taxes unnecessarily in the TOV funds and may have missed opportunities to improve the level of service available to residents.