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.

The Supervisor told us that he has not maintained any accounting records since 2013. Specifically, he does not maintain a general ledger, general journal, receipt and disbursement journals or revenue and appropriation ledgers. Further, he does not reconcile the bank accounts because there are no accounting records to compare to the adjusted cash balances. In fact, the Supervisor had not opened most of the bank statements for 2016 and 2017. We found 125 unopened bank statements in the original envelopes in the Supervisor's two offices at the Town Hall. Although the Supervisor appointed a Deputy to act in his absence, the Deputy is not involved in keeping any accounting records. In addition, the Supervisor has not asked the Board for authorization to hire a bookkeeper to help with recordkeeping responsibilities. Furthermore, officials were paying bills without knowing if sufficient funds were available in the various bank accounts. From February through June 2017, the Town bounced 26 checks totaling about $132,800, even though there was enough cash to pay the bills. The Supervisor has not prepared or filed an annual update document (AUD) with OSC for the 2013 to 2016 fiscal years. He has not provided the Board with any monthly financial reports showing all funds received and disbursed or budget-to-actual results since 2012. The Supervisor also did not deposit Town funds in a timely manner. In 2017 he made only one bank deposit in February of the $2.5 million check received from the tax collector for the 2017 tax levy. No other bank deposits were made until early June 2017 when the Deputy found numerous uncashed checks totaling over $975,000 in the Supervisor's two offices. Finally, the Board did not request the Supervisor to provide his books and records on or before January 20th of each year so the Board could perform the required annual audits from 2013 through 2016 and it did not engage an independent accountant to perform an audit.

District officials need to improve their maintenance of the vendor master file. Officials have not established written policies or procedures for maintaining its vendor master file. The Deputy Superintendent and business office staff are responsible for adding vendors and changing vendor information within the vendor master file. The District's vendor master file contained the names of 1,798 active vendors who received payments during our audit period. We reviewed the vendor master list and determined that 16 vendor names were duplicated multiple times and each of these vendors had from two to five different vendor identification numbers, representing 41 of the District's active vendors. We reviewed 102 invoices totaling approximately $478,000 from 66 vendors and found that all of these invoices represented valid claims. However, District officials did not have a W-9 on file for nine of these vendors. Without W-9s on file for all vendors, the District has not complied with federal tax requirements and there is an increased risk that payments may be made to fictitious vendors.

The Supervisor did not properly maintain the financial records and reports. The Supervisor relied on the Secretary to perform most of the financial transactions without providing adequate oversight. Consequently, the records are incomplete and not up-to-date, and are therefore, unreliable. Furthermore, the Supervisor did not provide the Board with the necessary financial reports to adequately monitor operations, and did not file the required reports with the appropriate agencies, including OSC and the Internal Revenue Service (IRS).

Town officials did not always ensure that purchases were at the best prices and disbursements were for proper Town purposes. Town officials purchased goods and services totaling $265,200 without soliciting competition, selecting the lowest bidders or using County or New York State Office of General Services (OGS) pricing. In addition, cost-benefit analyses were not conducted with consideration of other factors that impacted the purchasing decision. Also, disbursement duties were not segregated and mitigating controls were not put in place. As a result, there is an increased risk that public money will not be used in a prudent and economical manner and that errors or irregularities could occur and not be detected. In addition, claims may not be paid for proper Town purposes or prices.

Department officials did not review the bank statements and canceled check images for the bank accounts managed by the Treasurer and Fire Police Captain. Department officials did not deposit or account for all donations received or deposit money received from fundraisers and lounge sales. Deposits totaling approximately $158,300 were not supported by adequate documentation. Department officials did not approve 499 disbursements totaling $63,010 before payment was made.

In our prior 2013 audit, we recommended the Mayor and Council develop realistic budgets and adopt a multiyear financial plan. Our prior audit also discussed the use of casino revenue to balance the budget. However, the City did not maintain a multiyear financial plan and has continued to rely on unreliable revenues and one-time funding sources. From fiscal years 2014 through 2017, City officials balanced the budget using primarily casino revenue, averaging $9 million, and fund balance, averaging $2.9 million. By the end of 2017, we project that the City will deplete available fund balance. Assuming no additional casino revenue is received under the current compact, we project a general fund budget gap of $12 million for the 2019 fiscal year and subsequent years. If the current dispute with the Seneca Nation of Indians is not resolved positively for the City, City officials will have to make difficult choices to achieve some combination of reduced expenditures and increased revenues.

While the Board, by resolution, generally approved a warrant of claims, it did not perform an effective claims audit or establish an adequate process to ensure that transactions were properly authorized and approved, complied with statutory or Village requirements or that claims were for proper Village purposes. As a result, the Board does not have adequate assurance that goods and services are purchased at the best price.

The Board has consistently underestimated revenues and overestimated expenditures in its budgets over the past four years, which contributed to an accumulated surplus fund balance of approximately $360,000, about 81 percent of its annual budget. For the same period, the Library also increased the real property tax levy by approximately $26,000. As a result, the Library levied and collected more taxes than necessary.

The Board-adopted procurement policy meets all General Municipal Law requirements and includes a provision that requires a purchase order be approved prior to making all purchases in excess of $800 that are not subject to bidding requirements. However, the Board did not adopt a policy regarding the use of Village credit cards. In addition, purchase order requirements were not being enforced and credit card payments were made without adequate documentation.

The Board needs to improve oversight of the Treasurer, whose duties were not adequately segregated. The Treasurer is responsible for most aspects of District cash transactions (depositing, disbursing and recording) and preparing bank reconciliations. The Treasurer is also responsible for all aspects of payroll, including adding and deleting employees, making payroll changes, receiving and processing regular and overtime timesheets and printing, signing and distributing payroll checks. Because these duties are incompatible, it is imperative that the Board regularly monitors transactions processed by the Treasurer. The Board performs a proper claims audit and reviews the monthly bank reconciliations, cash summary and budget status reports provided by the Treasurer. However, the Board does not review the bi-weekly payroll until after the Treasurer distributes payroll checks. Although we did not find any material discrepancies, because the Treasurer performs payroll duties that are inadequately segregated with little Board oversight, there is a risk that errors and irregularities could occur and not be detected or corrected in a timely manner.

District employees did not properly use the biometric system, and the system and the District's payroll software are incompatible. Therefore, employees' time records captured in the system must be entered manually into the payroll software from the information recorded in the system. We tested one month of payroll for 169 employees, comparing the hours worked as recorded in the biometric system to the hours paid. We identified 36 transportation employees who were paid 741 hours, totaling approximately $19,000, more than the biometric system reports showed as being worked. There was no documentation explaining the differences. In addition, the District paid 191 Facilities Department employees for approximately 369 hours of overtime totaling $16,078 during April 2016. We compared the overtime hours paid to available overtime forms and found 19 employees were paid 207 overtime hours totaling $9,470 without overtime forms being submitted.

The County adopted an assigned counsel plan (Plan) in 1965 to provide representation by counsel. However, the judges and magistrates have not been provided with guidance for determining if indigent defendants qualify for assigned counsel and do not use the criteria and procedures provided by the Office of Indigent Legal Services (OILS). Instead, they exercise the broad discretion granted them by law; essentially making determinations based on their own personally developed and undocumented criteria and procedures. As a result, there is an increased risk that individuals could be denied counsel in one town or court while being granted such counsel in another town or within the same court. Furthermore, the Board did not periodically distribute or monitor the Plan. As a result, none of the 25 judges we interviewed tracked attorney assignments or submitted quarterly reports as required by the Plan. In addition, although the County paid over $2.9 million for assigned counsel costs over the last three years, the courts were inconsistent in their determinations of proper charges for providing counsel. County officials told us they believed they were limited in claims review because the decisions were ultimately up to the discretion of individual judges and that they relied on the Plan to address any needed requirements. However, the Board has not updated the Plan since 1965. As a result, there is an increased risk that assignments may not be made in the best interest of the defendants and free from conflicts and favoritism.

District officials accurately paid salaries and wages. We reviewed the gross pay calculations of 30 employees over four payroll periods, totaling approximately $252,000, to determine whether salaries and pay rates were authorized, overtime rates and hours were accurately calculated, and other provisions of collective bargaining agreements were accurately calculated and paid. Except for minor discrepancies which we discussed with District officials, the District accurately calculated and paid gross salaries and wages. We commend District officials for establishing a well-designed system for processing payroll to ensure that employees are accurately paid the salaries and wages to which they are entitled.