During our audit period, the District purchased two non-firefighting vehicles at a net cost of $54,089. In June 2015, the District purchased a 2015 SUV for $39,494. In August 2015, the Board traded in a 2011 vehicle for $10,000 and applied the proceeds towards the purchase of a 2015 SUV that cost $24,595. These two vehicles, which were both black, were not clearly marked on their exterior as District vehicles. District officials told us that the vehicles are not marked because they are not used for firefighting purposes. During our audit period, these two vehicles were driven a combined total of 15,151 miles and were used primarily by the Commissioners. The Board did not appropriately document and monitor use of these vehicles or ensure that they were used primarily for actual and necessary District purposes in an efficient and economical manner as required by the policy. Although the vehicles were purchased in mid-2015, no use was recorded for either vehicle in the vehicle use log until May 2016. The unrecorded mileage for both vehicles during this period totaled 11,513. As a result, District officials have no record of who used these vehicles or for what purpose from the time of purchase until May 2016. If the District had reimbursed the Commissioners or personnel for the 1,989 miles that were for documented District purposes, the cost would have been about $1,110 or about $3,330 annually. It may be more cost effective to reimburse officials actual and necessary business travel rather than purchasing and maintaining two vehicles that are not intended to be used for firefighting purposes.

Our review of $113,000 in total travel expenditures incurred during 2015 and 2016 identified significant potential savings that the District could have achieved in reimbursing officials for meals, lodging and vehicle rentals. Although the Board has not adopted a written travel policy, it adopted a resolution establishing a per diem rate of $100 to cover meals and incidental travel expenditures. However, this rate exceeded the GSA per diem rates for meals and incidentals. Of $31,100 that the District paid to 14 officials for meals and incidentals during 2015 and 2016, it could have saved up to $17,600, or 57 percent, by using the established GSA rates. In addition, the Board has not established clear limits or parameters for determining reasonable lodging costs or cost-effective methods of travel. Of $39,700 in lodging transactions for 10 overnight trips, the District potentially could have saved up to $12,800 (32 percent) if discounted conference hotel rates were used when available. The District also paid $2,600 in vehicle rental costs for officials attending three out-of-state conferences in 2015 and 2016 but could have saved up to $1,600 (62 percent) had District officials shared rental cars.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. However, Village officials have not filed the annual update document (AUD) for the 2015-16 fiscal year, making them at least 180 days late. Village officials should file their 2015-16 AUD with OSC as soon as possible. Finally, the Village's proposed budget does not comply with the property tax levy limit.

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget for the general, electric and parking funds are reasonable. The water and sewer funds' tentative budgets are not balanced and include a deficit of approximately $236,000 and $206,000, respectively. Village officials plan to raise water and sewer rates. The Village has adopted a local law to override the tax levy limit.

The Clerk-Treasurer performed all the financial duties with limited Board oversight. The Board did not require an annual audit of the Clerk-Treasurer's records and reports. The Village paid claims totaling $91,247 that did not have proper detail and support.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. However, based on the 2017-18 proposed budget, the Village will have exhausted 91.2 percent of its taxing authority. The Village's ability to rely on real property taxes as an increased revenue source in the future is limited. If the Village exceeds its tax limit, the State Comptroller is required to withhold State aid in an amount equal to the tax limit exceeded. We caution the Village that if property values do not increase, the ability to increase taxes may be reduced in the future. The Village's proposed budget includes a tax levy which does not increase the tax levy over the 2016-17 fiscal year.

District officials accurately paid employees' salaries and wages. We reviewed all gross pay calculations totaling approximately $2.5 million for 30 employees during our audit period to determine whether the information entered into the system agreed with the time records, pay rates agreed with Board resolutions, individual employee contracts or collective bargaining agreements and gross pay was accurately calculated. Except for some minor discrepancies, which we discussed with District officials, the employee salaries and wages reviewed were accurately paid. We commend District officials for establishing a well-designed system for processing payroll to ensure employees are accurately paid the salaries and wages to which they are entitled.

Salaries and wages, including overtime, totaled approximately $303.6 million (38 percent) of the District's expenditures of $800.4 million for the 2015-16 fiscal year. The significance of the District's payroll costs highlights the importance of having effective procedures to accurately calculate salaries and wages. District employees' payroll-related payments that we tested were often incorrect or unsupported. The District did not have written policies or procedures for the processing or monitoring of payroll payments. The process that was in place was disjointed, decentralized and not well documented. Due to the large quantity and variety of contracted miscellaneous payments and salary adjustments across four collective bargaining agreements, numerous staff are necessarily involved in processing different types of payments. However, this makes it virtually impossible for payroll staff to identify all of the payments due, changes required and data entry or calculation errors made in the time available to process the payroll. Although the errors we found did not involve significant amounts of money, they were pervasive within the payroll system and were not detected timely by District staff in their regular course of business. The Board and District officials did not implement adequate monitoring procedures to ensure staff consistently complied with General Municipal Law or District purchasing policies and procedures when making purchases on the District's behalf. Hundreds of staff routinely made purchases outside the normal requisition and purchase order process, through the use of District procurement cards, significantly increasing the risk of unauthorized or overpriced purchases.

Village officials have established effective procedures that ensure claims are adequately documented and properly supported, for legitimate Village purposes and presented and approved by the Board before payment. We commend Village officials for establishing effective procedures for processing claims. Establishing and adhering to effective claims auditing procedures decreases the risk that errors or irregularities in processing and paying claims could occur and not be detected in a timely manner.

The Chenango Valley Central School District is located in Broome County. Chapter 260 of the Laws of 2008 authorizes the District to issue debt totaling $3.5 million to liquidate the accumulated deficit in the District’s general fund and food service fund as of June 30, 2008. New York State Local Finance Law Section 10.10 requires municipalities and school districts that have been authorized to issue obligations to fund operating deficits to submit to the State Comptroller each year, starting with the fiscal year during which the municipality or school district is authorized to issue obligations and for each subsequent fiscal year during which the deficit obligations are outstanding, their proposed budget for the next succeeding fiscal year. •We found that the significant revenue and expenditure projections in the proposed budget are reasonable.

While Village officials have developed a plan (with multiple scenarios) for the wastewater treatment facility's bio-digester capital project, it raises many significant questions about the cost effectiveness. The plan presented to the public included new revenues that would essentially pay for the cost of construction and operation of the bio-digester. According to the Village's engineers, a bio-digester is not a necessity for the wastewater treatment facility's operations. It would operate in addition to the Village's wastewater treatment process. However, by adding it, the facility could potentially reduce its operating costs. In addition, Village officials told us they believe that adding a bio-digester to the wastewater treatment facility would entice businesses to stay in the Village and attract others to the area. However, adding the bio-digester subjects the Village to significant risks because if the potential users discontinue operations or opt not to use the bio-digester, the Village will continue to incur substantial costs. We reviewed the plans presented to the public, including the costs, potential revenues and any alterations that might impact the sewer users. Our review found that these plans were based on revenue estimates that may not be attainable and could result in significant costs to sewer users.

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.