We found that the Board generally provides adequate oversight to ensure that financial activity is properly recorded and reported and District money is safeguarded. The Board adopted a procurement policy that addresses all procurement of the District's goods and services. We reviewed bank statements and deposits totaling $345,323 and found that the money was properly deposited and accounted for. We also reviewed 278 disbursements totaling $395,648 and found they were generally supported with adequate documentation, properly authorized and for valid District purposes. However, these purchases were not always made in compliance with the District's purchasing policy. As a result, the District did not solicit competition, or retain evidence of soliciting competition, for 97 purchases totaling $171,013 that were subject to its purchasing policy. The majority of these purchases were for a capital construction project and building maintenance on the District's fire hall ($57,831), liability insurance ($41,596), fleet maintenance ($30,919) and firefighter physicals ($14,178).

The Village has a Friday through Thursday, two-week pay period. Employees are paid on the Friday after the pay period ends. All departments are required to submit payroll information to the Deputy Treasurer on Tuesday (two days before the last day of the pay period) for it to be processed by Wednesday. Therefore, the Departments submit employee timesheets prior to actual hours being worked on Thursday. In addition, some Village departments are not following the established pay periods and are submitting payroll information based on different pay periods created on their own. Because the pay periods are different depending on Department, an employee could be paid for hours that were not worked. We also found that timesheets did not have employees' signatures or show actual hours worked. We reviewed payroll records for the Department of Public Works employees who performed out-of-title work duties for the three test months. Five of the 12 employees were overpaid a total of $902. Finally, the Village under-budgeted for overtime in the 2016-17 fiscal year by $284,608 or 43 percent.

We found that payroll access rights were not adequately restricted to employees based on job duties. In addition, duties related to the payroll certification process were not properly segregated. Finally, except for minor discrepancies, which we discussed with BOCES officials, the employee salaries and wages we reviewed were accurately paid.

The District's unrestricted fund balance has exceeded the statutory limit for the past three fiscal years by amounts ranging from $1.5 million to nearly $3 million, or by 5.7 to 10.3 percentage points. Although the Board appropriated fund balance each year to help finance the budget, none of it was needed because the Board and District officials overestimated appropriations each year. District officials have also allowed the unemployment reserve balance to accumulate to an excessive level and have not used funds from the retirement contribution reserve as budgeted. As a result, the Board and District officials have missed opportunities to reduce taxes and return excess funds back to the residents.

The District Clerk's (clerk) duties are not adequately segregated because she processes all non-payroll and payroll disbursements with limited oversight. For example, the clerk is able to add vendors, process invoices and record disbursements in the computer system. The clerk is also responsible for performing nearly all human resource and payroll functions, including adding and removing employee records in the payroll system, entering and adjusting pay rates and processing payrolls. Additionally, the clerk prepares and prints non-payroll and payroll checks, opens mail (including bank statements) and prepares bank reconciliations. We found that salaries and wages were accurately calculated and paid. Finally, the Treasurer did not control her signature or supervise the application of her signature during the check signing process. The clerk prepares and prints checks that contain the Treasurer's signature without any oversight, approval or direct supervision from the Treasurer as required by the policy.

The Town's accounting records did not include a part-town (PT) general fund. General fund PT revenues and expenditures were not properly allocated. Specifically, revenues and expenditures related to building inspections, code enforcement, registrar of vital statistics, recreation and the Town's contribution to the Dannemora Free Library were budgeted for in the TW general fund even though these transactions are required, by various statutes, to be accounted for in the PT general fund. The 2016 and 2017 TW general fund budgets contained PT revenues totaling $4,500 and $5,500 and PT appropriations totaling $79,120 and $79,159, respectively. During the audit period, $148,278 was allocated to the town-wide (TW) general fund instead of the PT general fund. As a result, the Town unnecessarily taxed Town residents residing within the Village which subsequently lowered tax rates for Town residents living outside of the Village.

The Board does not have a comprehensive multiyear financial and capital plan or reserve policy to address the Town's operational and capital needs, including the replacement of vehicles and equipment, infrastructure or the aging highway garage. We examined all 35 Town-owned highway assets to determine their age and remaining useful life. Based on the asset's average age, many of the highway's capital assets have exceed their useful life. The Board also has not adopted an adequate fund balance policy, which resulted in the Town accumulating excessive fund balance in the general fund.

Although our testing found receipts were deposited in full, they were not always timely. There were 149 clerk fee receipts totaling $4,200 and 53 real property tax receipts totaling $128,000 that were deposited up to 22 days late. The Clerk properly recorded, reported and disbursed all money collected. For example, we found the collected 2016 and 2017 real property taxes totaling $1.7 million and sewer rents totaling $12,900 were disbursed to the proper parties.

The Board has not adopted comprehensive written procedures for managing system access. Consequently, the College's Active Directory database has 2,317 student accounts and 181 employee accounts that have not been not used in the last six months. The oldest employee account had a last logon of May 22, 2007, over 10 years ago. The IT Director has a breach notification policy in a draft format, but it has never been approved by the Board. The Board has adopted a computer use policy. However, the Internet usage log is not routinely reviewed for compliance with that policy. Although the College has a disaster recovery plan that appears adequate, it has never been tested to ensure that employees understand their roles and responsibilities in a disaster. The IT Director told us that to properly test the plan, a back-up server would need to be used; however, the College does not have one readily available for this purpose. Finally, while the College provides brief IT training upon hire, there is no formal IT training on a regular basis.

The Superintendent designated an inventory secretary (secretary) who compiles the inventory using information provided by the accounting department and computer network specialists. Upon receiving this information, the secretary reviews the data provided to identify all assets that are over the District's $500 threshold, then records those assets into the District's inventory record. However, because neither accounting personnel, nor the computer network specialists provide this information timely, the secretary cannot maintain a complete and accurate inventory record. In addition, the Assistant Superintendent for Finance and Management is not ensuring that a physical inventory is conducted more frequently than every five years and that any differences from the District's inventory records are investigated. For instance, the District purchased $2.9 million of IT assets in 2016-17, $2.6 million of that through the Smart Schools Bond Act. However, accounting department staff did not provide the 2016-17 inventory additions until September 9, 2017, which resulted in most of the 2016-17 assets not being added to the District's inventory records. We selected seven IT asset claims that contained 276 items totaling $109,031 to determine whether assets were recorded in the District's inventory records and physically located in the recorded location. Except for a smart document camera valued at $799, none of the assets purchased on the selected claims were recorded in the District's inventory records.

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.