We found that Village officials have not enforced compliance with the Village's procurement policy. Village officials allowed goods and services to be purchased before authorization from the Clerk-Treasurer, which resulted in “confirming” POs (prepared after a purchase had been made). Also, Village officials did not obtain sufficient quotes for purchases not subject to bidding requirements. As a result, the Board does not have adequate assurance that goods and services are purchased at the best price.

The District Clerk enters certain information for new employees into the payroll system (system) and the Director enters the Board-approved salaries and pay rates for each new employee. Then, on an ongoing basis, the payroll clerk updates salaries and wage rates for existing employees, and enters any subsequent job titles, salary increases and stipends into the system, as needed. All employees, except the Director and Superintendent, complete timesheets that are gathered, reviewed and approved by the supervisor of each building and department. Once approved, time sheets are sent to the payroll clerk who enters time and attendance information into the system and then processes the payroll. The Director then reviews the payroll check register, which includes each payroll check number, date, employee name and total payment for each employee. However, the Director told us during fieldwork that he focuses mainly on verifying the check totals. As a result, the Director does not adequately review the accuracy of payroll, in particular in situations where wages or pay rates change, or when there are additional payments.

The Board and District officials did not develop reasonable budgets or effectively manage the District's financial condition to ensure that the general fund's unrestricted fund balance was within the statutory limit. District officials overestimated operating expenditures in each of the last three fiscal years totaling about $7.6 million (9 percent) and appropriated nearly $5 million in fund balance, 97 percent of which was not needed to fund operations. Further, District officials incorrectly reported the District's current liability for compensated absences on its balance sheet. This understated the District's unrestricted fund balance by an average of about $355,000 in each of the last three fiscal years. After adding back the unused appropriated fund balance and incorrectly reported compensated absences liability, the District's recalculated unrestricted fund balance annually averaged about 12.4 percent of the ensuing years' budgetary appropriations, which is 8.6 percentage points more than the statutory limit. Finally, the Board has not adopted a long-term financial or capital plan evaluating and addressing the District's financial and capital needs.

Authority officials control gate entry to the treatment plant but do not adequately monitor trucked in waste and ensure that all waste discharged is properly billed and complies with discharge limitations. IWS personnel do not measure or verify the amount of liquid and/or slush waste trucked in for treatment and disposal; instead, they allow haulers to self-report on the volume in their loads. As a result, the Authority could be losing out on as much as $300,000 in annual revenues. In addition, the IWS Administrator has not periodically sampled and conducted all required analytical data tests to ensure waste discharge complies with discharge limitations. From July 2014 through November 2016, the Authority conducted 65 (32 percent) of the minimum 204 waste sample analysis tests. While the Authority paid $15,800 for these 65 tests, the permits provide that the Authority could instead require the haulers to conduct these tests. This would reduce Authority costs. We estimate these costs would be over $35,000 if the Authority conducted, at a minimum, the required three sample tests during the year for each hauler. Further, because sampling activity is not in accordance with Authority requirements there is an increased risk that haulers will not be charged enough to treat their waste and that their discharge could have an adverse effect on Authority personnel and equipment.

The Board did not always authorize disbursements prior to payments being made and the Treasurer did not always accurately calculate disbursements. We reviewed all 567 withdrawals and disbursements made by checks, and their supporting documentation, totaling approximately $1.5 million during our audit period. We found all withdrawals were appropriate and made for the purpose of transferring money between District bank accounts. Additionally, except for immaterial discrepancies that we discussed with District officials, disbursements were properly supported and made for appropriate purposes. However, we found disbursements made to pay bills were not always authorized prior to payment. We found 107 disbursements totaling $57,670 were made prior to Board authorization. For example, a disbursement for fire truck repairs in the amount of $16,000 was made 47 days prior to the Board's authorization. Another disbursement for testing fire hoses in the amount of $5,200 was made 22 days prior to the Board's authorization.

The Board adopted written cash receipts and disbursements policies in January 2017, but no written policies or procedures were in place during our audit period. The Board adopted an annual resolution granting the Treasurer the authority to pay specific recurring claims. However, the Board did not perform an audit or review District claims. The Board's insufficient oversight of the disbursements process creates a risk that payments may not be for appropriate purposes.

Each year at the annual organizational meeting, the Board reviews and readopts the procurement policy. The policy provides specific guidelines for Village officials to follow when soliciting competitive bids and quotes for the purchase of goods and services. The Village spent approximately $644,000 in 2014-15 and $588,000 in 2015-16 for goods and services. We reviewed 21 purchases totaling $784,364. Village officials generally followed the procurement policy and General Municipal Law for 15 of these purchases. However, Village officials did not competitively bid the purchase of a truck for $23,682 and did not obtain quotes, as required by the procurement policy, for five purchases totaling $75,334. Also, while not required by the procurement policy, Village officials did not use competitive methods to procure professional services from four service providers who were paid a total of $411,818.

Village officials have not implemented appropriate policies and procedures for monitoring acceptable use as defined by Village policy, breach notification or disaster recovery, and have not entered into a formal contract with the Village's IT service provider. Consequently, there is an increased risk that productivity will be reduced, IT assets and information could be compromised and that affected individuals may not be notified. In addition, the Village could suffer interruption of operations and there could be a lack of individual accountability for various aspects of the IT environment.

Land Bank officials monitor the number of homes rehabilitated and sold by the Subcontractor and all 10 projects we reviewed were awarded to the lowest bidders. However, Land Bank officials do not adequately monitor other aspects of performance, such as the selection of construction managers, awarding of contracts for projects or subcontractor performance. As a result, there is an increased risk that managers will not be assigned for sound reasons and without favoritism and that projects will not be completed in a timely manner or for the best value. Land Bank officials also do not adequately monitor cash disbursements or profits from the sale of rehabilitated homes to ensure they do not exceed the grant maximum of 15 percent of the project's cost. Although the profits for all 10 properties we reviewed were appropriate, there is an increased risk that profits will exceed the grant maximum. There is also an increased risk that the Land Bank could pay for costs already subsidized by other funding sources or for goods and services that are inappropriate or not received.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable.

While we found that the District's financial activity is properly recorded and reported and money is safeguarded, we also found that the Board does not provide sufficient oversight over the Treasurer, whose duties are not adequately segregated. The Treasurer is responsible for all aspects of the District's cash transactions including receipting, disbursing and recording, as well as preparing bank reconciliations. The Board reviews the check register that the Treasurer provides monthly and performs a proper claims audit. However, the Board does not review the bank reconciliations or canceled check images. Further, while the Board annually contracts with a certified public accounting firm to perform an annual audit, the Treasurer does not provide monthly financial reports to the Board during the year. These budget to actual revenue and expenditure status reports could serve as a tool for the Board to perform its oversight duties.

District officials have established an inventory policy that requires all equipment with a cost of $500 or more to be accounted for and entered into the District's inventory system. However, the asset policy does not ensure that inventory records are managed by someone independent from purchasing assets, maintaining their custody or disposing of them. While the Superintendent approves all purchases and she or the School Business Official approves disposals, the IT Specialist can initiate a purchase and the disposal of an asset. As a result, District procedures do not adequately protect the assets from the risk of being lost, stolen or misused without being detected.

District officials made 38 credit card purchases during our audit period that required prior approval because they were in excess of $500. Of those purchases, 22 (58 percent) totaling $22,224 were not approved in advance by either Board approval or purchase order. Of these, nine totaling almost $11,500 had purchase orders dated after the purchase was made. In addition, we identified inconsistencies related to purchase approval documentation for the 16 purchases that were approved. The District paid 24 claims totaling $87,233 during the audit period. However, one paid claim totaling $9,026 was missing. District officials provided this claim to the District's external auditors, but it had not been returned. As a result, we could not determine the number or purpose of credit card purchases paid by that claim. The remaining claims totaling $78,207 were for 316 credit card purchases of which 169 (53 percent) totaling $38,478 did not have adequate supporting documentation. Specifically, these claims did not have purchase receipts or related documentation. Although we were able to obtain reasonable assurance that the purchases were made for legitimate District purposes, the Board should not have approved payment for the 169 purchases without receipts or other supporting documentation.

The Board could improve its oversight of the Company's fiscal activities and the safeguarding of its resources. The bylaws do not adequately segregate the Secretary/Treasurer's duties. The Secretary/Treasurer receives all Company moneys, pays all bills, verbally reports the Company's financial status at regular Company meetings and keeps a record of the Company's monthly meeting minutes. Although the Secretary/Treasurer read the paid bills to the membership each month for approval, no review of the vouchers, invoices or bank statements was made by members of the finance committee prior to payment. Also, the adopted policies for credit cards, procurement and bill paying were inadequate. Finally, the finance committee did not complete an annual audit of the Secretary/Treasurer's books and records in January 2015 or 2016.

Although the Board has adopted a credit card policy, it did not establish written policies and procedures for gasoline credit card use and monitoring. The credit card policy does not identify the number of cards to be issued or the individuals authorized to use the cards. District officials did not always assign gasoline credit cards to a particular vehicle and, when they did, the assigned card was not required to be used only for a particular vehicle. Also, one PIN was issued to a group of employees rather than to individuals, and one PIN was issued for the District's boat. As a result, accountability over gasoline purchases is diminished and there is limited assurance that the $19,225 in gasoline purchases made by District employees and officials were for proper District purposes.

While the procedures in place for the collection and disbursement of occupancy taxes paid to the County were sufficient, the Treasurer could improve oversight by implementing procedures to ensure that establishments are paying the correct amounts. Procedures should include an analysis to compare the total taxable sales for lodging accommodations as reported by the Tax Department to what was reported to the County. We found variances that indicate the County possibly could have collected an additional $1.9 million in occupancy tax revenue. In addition, procedures should also include steps to identify lodging facilities that are not registered with the County. We identified 16 lodging facilities not registered with the County that should have been remitting occupancy tax. For 12 of these businesses, we estimated the County could have collected approximately $101,000 for the period of June through August 2015. The Director did not conduct inspections of certain weighing and measuring devices, perform packaged commodity inspections and verify pricing and scanning accuracy in all potentially eligible businesses in the County. The Director can enhance consumer protection by maintaining up-to-date inventories of retail businesses for both inspection and price testing purposes, and by documenting inspection and test results. Also, the Department did not maintain records of the complaints it received or the actions it took to address them.

We found that the Treasurer maintained appropriate financial records and disbursements were generally for reasonable Department expenditures. However, oversight of the Department's financial activities could be improved. The Department has a constitution and bylaws, but they do not define the financial oversight responsibilities and do not provide specific guidelines on how the membership should exercise its decision-making power. As a result, the Treasurer makes deposits, disburses cash and performs all recordkeeping functions without an adequate independent review. Additionally, a code of ethics has not been adopted. The Treasurer did not provide a written monthly report to the Department officials that detailed the receipts and disbursements each month and the officials and membership have not required the Treasurer to submit an annual report for their review. Furthermore, the Treasurer has not filed the annual foreign fire insurance report for 2015, as required by GML. These weaknesses in oversight create a risk that Department resources may not be used for appropriate purposes or that related decisions may not be in the general membership's best interest.

We found that the Board generally provides adequate oversight of District financial activities to ensure that financial activity is properly recorded and reported and that District money is safeguarded. We commend District officials for designing and implementing an effective set of controls over cash receipts and disbursements.

The Board adopted a resolution authorizing the Treasurer to pay “customary and normal utilities bills” prior to audit. The Treasurer manually prepares disbursement vouchers for each vendor invoice received and provides them to the Board for its review and approval at each monthly Board meeting. The Treasurer does not provide the Board with a warrant, abstract or a list of checks. Three Board members review and approve each claim voucher at the meeting, which is evidenced by their signature on the voucher. The Board does not adopt a resolution approving the claims, and there is no record in the meeting minutes which, if any, claims the members reviewed and signed. The Treasurer then prepares the vendor checks on pre-printed check stock that is electronically affixed with his signature. The Treasurer gives the printed checks and the claim vouchers to a Board member, usually the Chair, for a second manual signature. The Chair compares the prepared checks with the vouchers to ensure the payments are for valid District purposes before signing the checks. He does not compare them to a list of approved claims, confirm the sequence integrity of the check numbers or perform any other control procedure. The Treasurer provides the Board with a list of the mailed disbursement checks at the following Board meeting. The Board then adopts a resolution approving the total dollar amount of the disbursements, after the checks have been endorsed and mailed to vendors. However, the resolution does not include information indicating the number of checks or check number sequence. Because the endorsed checks are mailed prior to the resolution, the Treasurer is paying them in advance of Board approval. In addition, Board members are not provided with a warrant, abstract or a list of checks to compare to the vouchers they are reviewing. Further, no record is maintained of the claims reviewed and approved to compare to the list the Board receives at the subsequent Board meeting. Without a list of claims, the Board cannot be assured that it is reviewing and approving all District claims prior to payment.

The Board needs to improve its oversight of the Authority's operations. During our audit period, the Authority maintained five operating accounts (one for each of its three housing developments, one for the property in development, and a general operating account) and issued 1,536 non-payroll checks totaling $6,324,737. However, the Board and Authority officials have not adopted policies and procedures to ensure that cash receipt, cash disbursement and bank reconciliation duties are segregated. As a result, the Administrative Assistant records and deposits cash receipts, disburses moneys and reconciles bank accounts. In addition, the Board has not established compensating controls, such as reviewing monthly reports (comparing budgeted to actual expenditures, bank reconciliations or cash flow projections) or reviewing the Administrative Assistant's work.