The President did not enforce the bylaws and the bylaws did not adequately segregate the Treasurer's duties. In addition, the Department officials have not adopted written financial policies or procedures addressing cash receipts, disbursements, claims processing or fundraising accountability. As a result, Department officials did not provide adequate oversight of the Department's financial activities. Revenues were collected by various Department officials and were not adequately documented to indicate the amount and source of the money received. Duplicate receipts were not issued for any collections or remittances. The Treasurer's duties were not segregated as he made all deposits, performed all recordkeeping functions and prepared bank reconciliations without independent oversight. The Treasurer did not file an annual report of revenue and expenses with the Secretary as required. The Treasurer provided monthly oral, rather than written, reports to the membership of revenues, bills to be paid and cash balances, but individual claims were not reviewed prior to the payment approval. The Board did not perform an audit of the Treasurer's records even though an audit is required every six months. The Department does not have a code of ethics as required by statute. Finally, the Department did not obtain required licensing for its games of chance, purchase dispensing machines and bell jar tickets from licensed vendors, maintain records and report the results to the NYS Racing and Wagering Board as required.

The Village paid approximately $3 million for overtime wages, with $2.2 million or 72 percent paid to the police department. Because the police department's management monitored overtime, we were able to determine that over 50 percent of the police department's overtime was due to staff shortages. Based on the overtime hours that resulted from the shortages and the cost of a new officer, we estimate that the Department could hire five new officers without increasing overall costs. With a decrease in overtime, sick time may also decrease. Although the collective bargaining agreements (CBAs) elaborate on leave time accrual records, there are no written policies or procedures governing how leave time accrual records are maintained or who is responsible for monitoring the balances. As a result, 27 out of 50 employees we reviewed (54 percent) carried over vacation leave from year to year even though it was not permitted by their CBAs.

The District needs to improve its budgeting practices to ensure that budgets are accurate and take action to address the reasonableness of fund balance, including reserves. The Board and District officials consistently overestimated appropriations by an average of $3.7 million, or 9 percent, leading to average annual surpluses of $1.2 million. District officials appropriated an average of $3.2 million in fund balance each year which was not needed to finance operations. When unused appropriated fund balance was added back, the District's recalculated unrestricted fund balance exceeded the statutory limit by 7 to 9 percentage points. In addition, the District maintains seven reserves totaling $15.6 million as of June 30, 2016, three of which, totaling $14.8 million, appear to be overfunded.

The Board has not adopted comprehensive written policies or adequately segregated financial duties to properly monitor banking activities. Although our review did not indicate any inappropriate banking activity, we found payments were made without Board approval. Further, the Board did not provide sufficient oversight over the assistant whose duties were inadequately segregated. As a result, there is an increased risk that cash payments or electronic transfers may be made for inappropriate purposes and not detected in a timely manner.

The Board needs to continue improving its management of fund balance to ensure financial stability. From 2011-12 through 2014-15, total fund balance decreased by $18.9 million (77 percent), from $24.4 million as of June 30, 2012 to $5.5 million as of June 30, 2015. Although fund balance has since improved, the Board should adopt a fund balance policy, adopt and monitor sound budgets and monitor and update its multi-year plan. From 2011-12 through 2014-15, unassigned fund balance decreased to $16,577, or 0.01 percent of the ensuing year's budget. In 2015-16, the Board adopted a budget that enabled the unassigned fund balance to recover to $9.9 million, or 3.2 percent of the 2016-17 budget.

The Treasurer did not maintain adequate accounting records to report the summer recreation program's (Program's) financial activity. The Treasurer did not maintain records to track the types of revenues received (e.g., registration fees, field trip fees and concession sales) and disbursements (e.g., payroll, supplies, field trip costs and candy) made by the Program. The Treasurer also did not prepare and provide monthly trial balances, budget-to-actual reports or a statement of cash balances to the Commission Board. Additionally, the Treasurer has not filed an annual update document with OSC since 2004. In addition, the Board cannot ensure that all Program collections were deposited. The Youth Director was not able to provide us with documentation to support the 30 deposits he made into the two checking accounts totaling $83,171 for registration fees, field trip fees and concession sales. The Youth Director stated that he disposes of all Program documentation upon completion of the Program each year. He did not issue duplicate press-numbered receipts when collecting fees for participants or retain any documentation to support any of the collections he received and deposited. The Board did not establish pay rates for Program employees. All Program employees were paid in accordance with salary schedules prepared by the Youth Director. Although Program employees were paid in accordance with the salary schedules, by allowing the Youth Director to set salaries, there is a risk employees will not be paid at rates in accordance with the Board's expectation. While it is acceptable for the Director to propose a salary schedule, it should be reviewed and approved by the Commission. Furthermore, the Board should not allow the Director to establish his own salary.

We identified a total of $32,179 in questionable and inappropriate payroll payments and unaccounted for cash receipts. Because the Board has not established proper controls over payroll, the clerk to the Supervisor (clerk) overpaid herself $13,940 for unauthorized direct deposits and inappropriate withholdings for retirement and health insurance. In addition, the clerk was paid for 482 hours of leave valued at $8,235 that she had not earned and was not entitled to. The Board's failure to establish comprehensive written policies and procedures for processing payroll and maintaining leave time accruals resulted in a lack of segregation of duties and sufficient compensating controls. This allowed the clerk to control all aspects of the payroll process and to overpay herself without detection. The Board and Supervisor also allowed the clerk to control most aspects of the cash receipts process and did not provide adequate oversight of her work. As a result, the clerk did not deposit a total of $10,004 in collections; Town officials cannot account for this shortage. The Board and Supervisor's failure to provide proper oversight of the clerk's financial activities resulted in the apparent misappropriation of Town money. There were likely additional cash receipts that were never recorded and deposited that would be almost impossible to find because of the Town's inadequate controls and records. Subsequent to our fieldwork completion in September 2015, we referred this matter to the Essex County District Attorney. As a result, the clerk was arrested and pled guilty, on August 10, 2017, to grand larceny, official misconduct and tampering with public records.

The Board needs to better manage fund balance, improve its budgeting practices and address the reasonableness of reserves. For the 2013-14, 2014-15 and 2015-16 fiscal years the Board overestimated appropriations by $4.4 million (9.2 percent). District officials also appropriated $1.5 million of fund balance that was not needed to finance operations because the District's budgeting practices produced operating surpluses totaling $2.2 million. When unused appropriated fund balance is added back, the District's recalculated unrestricted fund balance exceeds the statutory limit. As a result the District's tax levy was higher than necessary. Further, while the Board has adopted a reserve fund plan that discusses reserve funding levels, the plan does not include any specifics regarding the use of the reserves. In addition, the District is improperly retaining $1 million in the trust and agency fund for Other Post-Employment Benefits (OPEB). School districts do not have authority to reserve or set aside money for this purpose. The District is also inappropriately holding cash in the debt service fund, rather than using it to help pay the related outstanding debt or reduce the tax levy. Finally, three reserves may be overfunded.

College officials need to improve IT controls to help ensure that data is adequately secured and protected against unauthorized use. The Board did not adopt adequate IT policies that address appropriate computer use and security or provide training on its policies, cybersecurity and financial software application. We also found that employees had excessive rights to computer software. The Board also needs to improve its purchasing procedures to ensure College officials procure goods and services in accordance with applicable statutes. In addition, the Board did not identify a purchasing agent independent from the cash disbursement process to approve purchases. Also, although the Board awarded $101,840 in purchase contracts using what they believed was a “best value” method, the awards did not adhere to the GML best value method requirements. College officials did not ensure that claims were properly authorized, supported and for legitimate College purposes. Officials did not have any written procedures documenting the claims process. In addition, the President did not appoint an official claims auditor. Our review of 75 claims totaling almost $104,500 and 220 credit card charges totaling approximately $20,900 disclosed that department heads did not approve purchase requisitions and the Comptroller did not authorize claims before goods were received. Also, sales tax was charged on credit cards and College officials were unable to determine whether nine credit card charges totaling $623 were for proper College purposes because no documentation supporting these charges was maintained. Finally, College officials need to improve controls in the student accounts office to ensure student accounts are properly enforced if delinquent, and adjustments are properly approved and applied. Policies and procedures over student accounts were insufficient and not approved by the Board. Generally, students were accurately billed, tuition was accurately collected and refunds were appropriately applied. However, account adjustments were made without appropriate approval and delinquent accounts were not always adequately enforced.

District officials need to improve their fund balance management and budgeting practices. District officials reported unrestricted fund balance to be within the statutory limit but it was actually understated by more than $2.7 million as of June 30, 2016 because the Business Manager recorded an improper prior period adjustment. Had fund balance been reported properly, it would have exceeded the statutory limit by $2.7 million or 8 percentage points that year. District officials also did not ensure budgets were realistic and did not properly plan for the use of fund balance. The District generated a cumulative operating surplus totaling $8 million from 2013-14 through 2015-16. Although District officials appropriated approximately $2.2 million of fund balance on average to help finance the budget each year, none of it was needed because the Board and District officials overestimated appropriations each year by an average of $4.6 million, or 16 percent. When unused appropriated fund balance is added back to unrestricted fund balance, unrestricted fund balance exceeded the statutory limit by $5.2 million or 15 percentage points. District officials also overfunded the employee benefit accrued liability reserve (EBALR) by $267,000 (70 percent). District officials developed and implemented adequate written policies and procedures over the payroll process to ensure the accuracy of the compensation paid and benefits provided to employees. The District Clerk routinely records the Board's approval of individual contracts, collective bargaining agreements, appointments, salaries, wage rates, resignations and retirements and the effective dates of the activities in the Board minutes. We commend the Board and District officials for establishing and implementing an effective and efficient payroll system.

The Board has not effectively managed Town finances. The Board did not develop a long-term financial or capital plan, including a plan for reserves, or require a cash flow analysis. As of the end of 2016, the general fund's unrestricted fund balance totaled more than $3.3 million, or 11 times its real property tax levy and 101 percent of the ensuing year's appropriations. Although the Board reduced general fund appropriation estimates by $387,239 (11 percent), it also reduced revenue estimates by $222,821 (8 percent) even though prior year revenues had been underestimated. In addition, the Board increased appropriated fund balance by $60,582 (11 percent). As a result, fund balance will likely increase again in the ensuing year. The Board has not provided sufficient fiscal oversight of the Town's water operations. As a result, there are no procedures for the accounting records to be maintained for each water district or extension to ensure that costs are equitably and appropriately distributed. Town officials are not performing reconciliations to determine whether all properties in each district or extension are paying the appropriate amounts, such as comparing properties on tax rolls to properties billed for water, comparing district boundaries to properties assessed charges for each district, and comparing properties receiving water to those metered and paying for usage. The Board has not adopted IT policies to sufficiently protect its IT assets and did not ensure the adopted computer use policy was enforced or monitored. In addition, the Board did not ensure that adequate written agreements had been executed with the IT service provider or banks used for online banking. Town officials also did not adequately segregate online banking duties and did not dedicate a separate computer for online transactions to limit access to online bank accounts. Town officials did not generate or review the audit trail, exception and change reports, and the Board did not adopt a disaster recovery plan.

The Recreational Director, her assistants and the lifeguards collected pool fees but did not issue receipts or maintain other records to adequately account for collections. In addition, pool collections were not remitted timely to the Clerk-Treasurer. The Clerk-Treasurer did not ensure that her staff properly issued receipts for all collections. In addition, the Clerk-Treasurer did not perform daily reconciliations between collections and duplicate receipts or records maintained to document collections. Staff also did not update the accounting records timely or clearly and did not accurately record departmental collections. We also found that the Clerk-Treasurer did not deposit collections totaling $234 and did not deposit $3,133 in a timely manner. Finally, because the Board and Village officials did not enforce policies or implement proper controls over leave accruals, the Village inappropriately paid $5,149 for leave accruals to which employees were not entitled, allowed employees to abuse leave time benefits without consequence and risks paying out an additional $11,629 for unearned leave time.

District officials did not adequately monitor non-instructional employee overtime. They did not establish a policy or written procedures to ensure that all overtime hours worked were preapproved, adequately recorded and incurred only when necessary. Employees prepare an overtime sheet for any hours worked over their regular work day, but the form varies by department. There was no documented pre-approval for any of the overtime that we reviewed. All overtime was approved after the overtime was worked. In addition, four employees were paid overtime for their 15-minute break periods; time that is paid as part of their salary. In addition, many of the overtime sheets did not list the reason the overtime was necessary and the time period that the overtime hours were worked.

The Board and District officials did not develop reasonable budgets. District officials annually overestimated appropriations from 2013-14 through 2015-16. The budgets overestimated appropriations by almost $4.6 million or 7.4 percent over these years. District officials also appropriated a total of $2.5 million in fund balance that was not used to finance operations over these years. The District's fund balance increased by more than $2.7 million and exceeded the statutory limit by 13.3 percentage points at the end of 2015-16. The Board and District officials did not develop multiyear financial and capital plans that would define how unrestricted fund balance would be used. In addition, the Board did not establish reserve funds, transfer excess fund balance to the reserves or provide a provision in each year's budget to fund the reserves.

The Board needs to improve controls over the Library's cash disbursement process. Although the Board approved warrants that were prepared by the senior clerk, it did not audit and approve claims before they were paid. In addition, the Board adopted a policy granting check signing authority to seven Library staff members and officials, thereby curtailing the Treasurer's duties and diminishing an important segregation of functions designed to help ensure that Library funds are disbursed appropriately. Furthermore, while a petty cash fund is generally used for small, infrequent purchases, the Board established a petty cash fund at $25,000 rather than at the lowest amount practical. As a result, Library officials disbursed $146,877 from the petty cash checking fund for routine operating expenses during the audit period without adequate oversight. Finally, the Board did not monitor and amend its budget, which allowed budget line items to be routinely overexpended and purchases to be made without available appropriations.

The Board did not ensure that budget estimates or fund balance were reasonable and allowed unrestricted fund balance to exceed the statutory limit. Budget appropriations were overestimated by nearly $11 million over the past five years (2011-12 through 2015-16). Additionally, unrestricted fund balance totaled $5.5 million as of June 30, 2016 and was 14 percent of 2016-17 budgeted appropriations, exceeding the statutory limit by $3.9 million (10 percentage points).

The Board's adopted budgets overestimated appropriations in the 2012-13 through 2015-16 fiscal years. As a result, the District had significant operating surpluses which caused the fund balance to exceed the statutory maximum of 4 percent of the ensuing year's budget. The Board appropriated fund balance that was not needed to fund the budget and reduced fund balance levels to within the statutory limit. By routinely using these practices, the Board and District officials have, in effect, circumvented the 4 percent fund balance limit; may have levied more real property taxes than necessary; and retained large amounts of funds without full disclosure and transparency. District officials also created unnecessary budget encumbrances. Finally, the District's tax certiorari reserve, which totaled approximately $1.2 million at the end of the 2015-16 fiscal year, is undeterminable. Most of the reserve is based on old claims, going as far back as 2005 with no evidence of continued proceedings and appear to have been abandoned. Because no information was available for 2015 and 2016 claims, we concluded that an adequate amount of the tax certiorari reserve cannot be determined. Therefore, some of the moneys in this reserve should actually be included in unrestricted fund balance.

Library officials need to improve controls to ensure that Library IT assets are adequately safeguarded. The Board did not adopt any policies to protect its IT assets, establish written guidelines defining the roles and responsibilities of the Town's IT department and Library staff for the Library's IT environment or develop a disaster recovery plan. Additionally, Library officials did not have a comprehensive hardware inventory and can more effectively and efficiently manage software. As a result of these deficiencies, there is an increased risk that the Library's IT data and components may be lost or misused and that Library officials will be unable to resume operations in the event of a system failure.

The purpose of our audit was to determine whether IDA Boards provided effective oversight of the IDAs’ operations for the period January 1, 2014 through May 31, 2015.

District officials need to improve internal controls to help ensure that extra-classroom activity cash receipts are properly accounted for. Although the central treasurer maintained accurate records and appropriately withheld sales tax collected, collections were not always deposited timely and student treasurers did not maintain adequate supporting documentation for cash receipts. Because student treasurers did not maintain adequate supporting documentation for collections, District officials are unable to ensure that students are remitting funds to the central treasurer in a timely manner. In addition, student treasurers did not always maintain cash receipt and disbursement ledgers and none of them prepared profit and loss statements for fundraising activities. The Board did not adopt an adequate extra-classroom activity policy to provide comprehensive guidance for District officials and students. The Board also did not appoint a faculty auditor to ensure that receipts were issued, disbursements were supported with adequate documentation and student ledgers were maintained and reconciled with the central treasurer's records. Finally, when student treasurers do not maintain club ledgers or prepare profit and loss statements, students miss the opportunity to learn the business aspect of extra-classroom activities.