Town officials need to improve overtime payroll procedures to ensure overtime payments are accurately budgeted for and overtime worked and paid is in accordance with collective bargaining agreements (CBAs). The Board and Town officials did not develop overtime budgets based on known needs and historical trends. Each year, officials adopted overtime budgets with appropriations that were significantly less than the actual overtime expenditures of preceding years for the Police, Highway and Sewer departments. Officials did not adequately monitor adopted budgets and allowed them to be over-expended each year. We also found that although the Police Department's CBA allows officers to accumulate up to 80 hours of overtime during the year, Town officials did not adhere to those limits. Moreover, overtime and other payroll information was not accurately and consistently recorded, causing significant discrepancies in overtime records. Our review of work schedules, time sheets and payroll summaries for two payroll periods disclosed discrepancies between these three records in 24 of 50 instances tested.

The Board could improve its management of the Town's financial condition. While the combined town-outside-village (TOV) funds have sufficient fund balances to maintain operations, the Board adopted budgets that relied on fund balance to fund recurring expenditures and the Supervisor did not provide the Board with sufficient information to monitor fund balance or file the Town's annual update documents with our office in a timely manner. As a result, the Town had significant operating deficits and a deterioration in fiscal health and the transparency of the Town's financial management was limited.

City officials could better safeguard the City's water and wastewater systems. There is no formal process for staying current on system cybersecurity threats. Water and wastewater personnel do not receive alerts to such threats from key sources including the U.S. Department of Homeland Security's Industrial Control System Cyber Emergency Response Team (ICS-CERT) or the Water Information Sharing and Analysis Center (WaterISAC). The Superintendent indicated that they rely on the City's third-party vendors for threat information. However, we found no evidence that such information is routinely shared and the service level agreements between the City and these vendors do not require them to do so. In addition, officials have not provided employees with cybersecurity awareness training. Finally, officials do not prevent or monitor public disclosure of information that could jeopardize the City's systems.

The Court needs to improve its enforcement and collection of unpaid parking violations. The Board did not establish written policies and procedures to govern parking violations and Town officials did not adequately enforce unpaid parking ticket collections. As a result, the Town had 6,900 parking violations outstanding since September 1990. Based on the associated fines for these violations, we estimated that the Town is owed approximately $992,000 for outstanding unpaid parking violations as of June 30, 2016. Ensuring that collection efforts are working as intended can increase the Town's revenues from parking tickets. In addition, Court officials need to improve oversight to ensure that parking tickets are properly accounted for. Clerk duties were not adequately segregated and one clerk was responsible for all aspects of Court ticket functions without oversight. In addition, Town officials did not develop policies and procedures to account for all parking tickets. As a result, there is an increased risk that errors or irregularities could occur and not be detected or corrected in a timely manner.

Current officials of the participating municipalities were unaware they had entered into an intermunicipal agreement (agreement) establishing the Joint Youth Program (Program). Consequently, we found that several agreement provisions were not adhered to. In addition, the Program's agreement did not include provisions establishing adequate oversight of the Program's financial activities and we found that oversight of Program financial activities was inadequate. As a result, non-resident swim program fees in 2015 were not remitted to the bookkeeper for deposit and the swim program fees in 2016, which were remitted to the bookkeeper were not supported by adequate documentation, such as duplicate press-numbered receipts or daily collection reports. In addition, the Town's governing board did not establish or approve the salaries of any Program employees paid by the Town, except for the Town's recreation director. Furthermore, we found that 13 claims totaling $9,553 were not certified by a recreation director indicating their approval. We question the appropriateness of five claims totaling $856 for services provided that should most likely have been payroll disbursements, which were not supported by adequate documentation, and two claims totaling $1,894 for bus rentals that were not Program activities.

Town officials need to improve the fuel inventory recordkeeping to help ensure fuel is safeguarded. The Highway and Parks departments did not maintain records for 10,636 gallons of diesel fuel and 11,329 gallons of gasoline (collectively valued at about $35,600) dispensed from the mobile transfer fuel tanks and the Parks Department did not keep adequate records showing the amount of fuel used to fill its mobile tanks. The Board did not enter into written shared service agreements with any of the eight municipalities permitted to use Town fuel. Additionally, the Highway Department did not implement adequate procedures to ensure that municipalities are accurately billed for all fuel used. Parks Department officials did not establish procedures over the sale, inventory and accounting for nonresident parking permits to adequately monitor cash collections and permits issued. The Parks Department did not have written procedures requiring that the number of permits purchased be periodically reconciled with the number of permits sold, and Parks Department staff did not maintain any inventory records for these permits.

The Supervisor did not provide oversight of the accountants' duties related to maintaining the accounting records. Consequently, we found significant deficiencies with the Town's accounting records. From 2010 through 2016, the Town did not allocate sales tax revenue to its part-town funds to eliminate property tax levies in those funds before allocating any remaining sales tax revenue to its town-wide funds. As a result, $277,744 was improperly allocated to the town-wide general fund causing taxpayer inequities to occur. The Town lacked effective procedures to ensure water and sewer charges were accurately billed, collected and enforced. Finally, 26 of 50 claims reviewed (52 percent) totaling $59,113 were not audited and approved by the Board prior to payment.

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.