The clerks deposited receipts for fines collected intact and in a timely manner. However, Village officials have not established sufficient procedures for collecting unpaid parking violation fines or set a benchmark for collection rates. Although the Village's parking ticket collection rate exceeded 80 percent during fiscal years 2011 through 2015, the Village had $2.2 million in cumulative unpaid parking tickets outstanding as of June 30, 2016. This included 25,532 parking tickets totaling approximately $1.7 million that have been outstanding for more than five years and 5,323 unpaid parking tickets totaling $459,540 outstanding for less than five years. The Village has implemented some informal procedures for collecting parking ticket fines, such as contracting with the vendor. However, as of June 30, 2016, the tickets remained on the vendor's report of unpaid parking tickets and no additional actions were taken to collect these amounts.

We reviewed 27 purchases totaling $77,314 that required two written quotes to determine if District personnel obtained the required quotes. District officials were unable to provide evidence that they obtained quotes for eight of these 27 purchases totaling $19,700. In three instances for purchases totaling $5,207 the purchase order was dated after the invoice date and there was no evidence that any quotes were obtained. These three purchases included signs for $2,085, trophies for $1,565 and mechanic services for $1,557. We also reviewed 12 purchase contracts totaling $115,334 that required four written quotes. We found that all these purchases were properly documented, purchased from vendors with OGS contracts or from sole source providers. In addition, we reviewed all purchases from 11 professional service providers who were paid a total of $707,652 to determine if RFPs or other methods of competition were used to obtain these services. District personnel did not solicit competition for seven of these 11 providers who were paid a total of $127,705. For example, professional services for firefighter physicals costing $26,945 were not supported by documentation showing that proposals were obtained from similar providers. These services appeared to be for routine medical services. Furthermore, District officials were unable to provide us with documentation to show that they sought alternate proposals for the annual dinner costing $21,900 or equipment cleaning services costing $22,060.

College officials ensured that tuition and fees were properly billed, collected, recorded and refunded. However, we identified weaknesses in the College's use of a computerized program to maintain records of tuition and fee billings and collections. Specifically, we found that employees were using one computer account to process parking decals and not retaining information related to deleted receipts. In addition, College officials were not using a tracking feature to identify changes made within the computer system.

District officials overestimated appropriations in the adopted budgets for the 2012-13 through 2015-16 fiscal years. While the District appropriated fund balance to help finance operations, it was not needed because the District's budgeting practices produced operating surpluses. As of June 30, 2016, unrestricted fund balance totaled $2.9 million and was 9.1 percent of 2016-17 budgeted appropriations, which exceeded the statutory limit by 5 percentage points. This trend is projected to continue through 2016-17. The District also overstated certain liabilities and the reserve for encumbrances, which effectively reduced the amount of unrestricted fund balance available for appropriation to reduce the real property tax levy.

The District paid 325 claims totaling $814,379 during our audit period. We reviewed 70 check disbursements and corresponding claims totaling $517,140. The Treasurer told us he writes and dates checks prior to Board approval but does not mail them to the payees until after the Board reviews the claims and approves the abstracts at the monthly meetings. However, checks for 19 claims totaling $32,320 were cashed prior to Board approval. Thirteen of those 19 checks were cashed prior to Board approval because the Board made a motion to delay acceptance of the abstract until the following month. The remaining six checks were on abstracts that were approved by the Board during the same month, but the checks were still cashed prior to approval. Under Town Law, none of these claims were allowed to be paid prior to the Board's audit and approval. We also found four claims totaling $2,267 that did not have sufficient supporting documentation. These claims were for purchases at a local delicatessen and a repair shop and two credit card payments. Although the Treasurer told us they were for appropriate District purposes, without supporting documentation, the Board has no way to determine whether these claims were appropriate. Although fire districts are not required to pay sales tax on purchases and services they obtain, eight claims contained sales tax totaling $210. In addition, one credit card claim included unnecessary late fees and finance charges totaling $138.

The Board failed to fulfill its basic responsibilities of stewardship, oversight and leadership. Board members and Village officials did not perform many of the duties of their positions which resulted in significant Village-wide dysfunction. For example, the Board and Village officials have not addressed the repeated deficiencies to previous audit findings related to the audit of claims and the completion of bank reconciliations. Village departments are operating without sufficient oversight or clear guidance on the lines of authority. As a result, significant errors occurred in key business functions. Water rents are a major revenue source for the Village water fund. However, we found that water bills are often generated on meter readings or estimated readings that did not appear to be reasonable. In addition, when the Treasurer and Account Clerk/Deputy Treasurer positions were vacant, the Board instructed the Village Clerk to prepare the payroll. The Clerk did not receive any training on processing payroll. As a result, she overpaid four employees over $8,600 and processed a duplicate payroll for 52 employees. The Clerk also did not properly issue receipts for all money received and did not deposit collections in the bank in a timely manner. The Village has experienced significant employee turnover in key positions. The Board's lack of effective leadership has likely contributed to the significant turnover which, in turn, added to the negative working environment. Furthermore, the Village has no succession planning procedures in place to assure service continuity when the Village experiences employee turnover.

The Commissioner, who is also the District Secretary, provided us with a credit card policy. However, two other Commissioners were not aware of the policy and there is no record of the Board adopting the policy. The District issued five credit cards to the Commissioners and three to chiefs. However, the District also issued one card to the maintenance mechanic even though he was not an authorized user. District officials told us that although there is nothing documented in the Board minutes, the Commissioners were aware the mechanic was issued a card. District officials and the maintenance mechanic made 252 credit card purchases totaling $60,240 during the audit period. We reviewed all 252 purchases and determined that 32 purchases totaling $4,846, or 13 percent, lacked documentation or were for an improper purpose. For example, thirty-one purchases totaling $4,823 did not have the receipt of goods or services documented. District officials told us the Board generally requires documentation verifying the receipt of goods or services and receipts or invoices before approving purchases for payment but could not explain why some purchases were approved without such documentation.

The Board has not properly managed reserve funds. District officials could not provide evidence that approximately $3.3 million was required to be restricted in the debt reserve. The District also maintains an unauthorized E-Rate reserve totaling approximately $342,000. Furthermore, the District inaccurately reported the capital reserve totaling $330,000 and overfunded the tax certiorari and unemployment insurance reserves totaling approximately $297,000. Additionally, Business Office officials improperly restricted cash totaling approximately $1.2 million in reserve funds that was not approved by the Board.

The Board needs to improve its oversight of District financial operations. The Treasurer maintains custody of foreign fire insurance revenues on the Department's behalf. The foreign fire insurance money was placed in the District's general fund checking account and commingled with the District's other funds. Because the Treasurer did not keep separate accounting records showing the receipts, disbursement and balance of each fund, the Treasurer could not determine how the money was spent or the amount of foreign fire insurance money currently on hand. Furthermore the Board, rather than the Department membership, determined how the foreign fire insurance money was to be spent. The Board did not audit and approve all claims before payment, ensure that the Treasurer filed annual foreign fire insurance reports with the State Comptroller or adopt a code of ethics as required by General Municipal Law

The Board and District officials did not ensure that budget estimates were reasonable and did not properly manage fund balance. The Board adopted budgets for fiscal years 2012-13 through 2014-15 that appropriated fund balance totaling $9.6 million. However, because the Board overestimated expenditures by $31 million over the three-year period, the appropriated fund balance was not used. As a result, the District's unrestricted fund balance has exceeded statutory limits. When adding back unused appropriated fund balance, the District's recalculated unrestricted fund balance was as much as 6.5 percent of the subsequent year's appropriations. Additionally, District officials did not have documentation establishing the employee benefits accrued liability reserve and the insurance reserve funds totaling $17.2 million and accumulated funds in these two reserves for purposes not permitted by law. Further, the Board transferred $327,704 more from reserves than actual related expenditures and overfunded six of its reserve funds by almost $30.5 million.

We found the Board has established adequate controls to ensure that financial activity is properly recorded and reported and that District money is safeguarded. The District receives copies of canceled check images, which the Chairman reviews to ensure that District funds are used solely for legitimate District expenditures. The Treasurer has maintained complete, accurate and timely records to account for all of the District's financial activities. The annual financial report was accurate and submitted to the Office of the State Comptroller in a timely manner. Additionally, the Board contracts with an independent accountant to complete an annual audit of the Treasurer's books and records. Moreover, the Board has adopted a code of ethics, a procurement policy and investment policy, as required. We commend District officials for designing and implementing controls to ensure that financial activity is properly recorded and reported and that District money is safeguarded.

The Board needs to improve its oversight of the District's financial activity. The Board did not develop a procurement policy; an investment policy; a cash management policy, including the handling and recording of cash transactions; or a code of ethics. As a result, District employees had no formal guidelines for performing their duties, District recordkeeping was poor and Board minutes were incomplete. The Board also needs to improve its oversight of the Treasurer's duties, such as requiring that complete accounting records be maintained and performing periodic reconciliations. The Board did not annually audit the Treasurer's records and reports as required by New York State Town Law and did not ensure that the Treasurer prepared and filed the District's annual financial report with the State Comptroller in a timely manner. In addition, the Treasurer did not maintain complete and accurate accounting records and, as a result, could not prepare and file annual financial reports with the State Comptroller and the Board in a timely manner. Moreover, the Treasurer did not develop comprehensive financial reports for the Board. Finally, the Treasurer did not perform bank reconciliations for reserve accounts, and bank reconciliations for the general fund bank account were not accurate.

The School's charter requires School officials to obtain at least three quotes for the purchase of goods over $10,000 and to obtain Board approval for any purchases that exceed $20,000. However, the charter does not establish procedures for procuring services. The Board has not established adequate written policies or procedures for procuring services and has not provided adequate oversight of the procurement process. As a result, School officials did not use competitive methods when procuring goods or services. We reviewed purchases from 32 vendors who were paid approximately $2 million and found that School officials did not seek competition when procuring goods, services and insurance from 21 vendors who were paid more than $1.3 million during the audit period. As a result, the School may have incurred unnecessary costs. For example, the School purchased 150 laptop computers for $529 each without seeking competition. If the School had purchased the laptops using the applicable New York State bid contract, it could have saved $30 per laptop or $4,500 in total.

District officials have not established a policy or written procedures to ensure that all overtime hours worked by department employees are properly authorized. We reviewed overtime payments totaling $41,663 made to 10 employees and found that payments totaling $36,723 had not been preapproved. Because District officials have not always required employees to obtain written preapproval for working overtime, there is no assurance that the District is not paying more overtime costs than necessary.

For the 2013-14, 2014-15 and 2015-16 fiscal years, the Board and District officials overestimated expenditures by a total of $6.2 million (7.8 percent). Furthermore, when unused appropriated fund balance is added back, the District's recalculated unrestricted fund balance was in excess of the statutory limit. As a result, the District's tax levy was higher than necessary. Further, the Board did not adopt a written reserve policy and three reserves appear to be overfunded. District officials appropriated reserves as a funding source in the annual budgets, but did not always use those funds as planned. When the District used reserve funds as a financing source as planned in the budget, they transferred a similar amount from the operating surplus back into the reserves at year end. We also found that the employee benefit accrued liability reserve was improperly used for retirement incentives.

District officials granted unnecessary permissions for changing student grades, assuming accounts and identities, and viewing personal, private and sensitive information (PPSI). As a result, 17 users had permissions to change grades even though they were not responsible for doing so. Further, two users made 32 grade changes and permission forms could not be located for 13 of these grade changes. Also, 15 users, including 10 Mohawk Regional Information Center (MORIC) employees, could assume other student information system (SIS) users' accounts and/or identities and one user (a MORIC employee) assumed six different SIS identities seven times. Further, two MORIC technicians, who support the SIS servers but not the system itself, can view the SIS audit log, which contains students' medical information, dates of birth and home addresses. Because the SIS does not generally create records in the audit log when users view information, we could not determine whether PPSI has been accessed inappropriately. These activities were not detected and investigated by officials because, at the times, officials did not routinely monitor audit logs. Stronger procedures would help officials safeguard PPSI from potential unauthorized activity that may not be detected and addressed in a timely manner.

The Board and District officials need to improve the budgeting process to ensure that budget estimates and fund balance are reasonable to effectively manage the District's financial condition. The Board and officials overestimated expenditures by approximately $4.1 million and underestimated revenues by approximately $900,000 from 2012-13 through 2014-15, which generated more than $5 million in operating surpluses. Further, the Board and officials increased the tax levy by almost $1.1 million (13.7 percent) over these years. As a result, approximately $2.6 million of appropriated fund balance was not used to finance operations. From 2012-13 through 2014-15, District officials reported appropriated fund balance totaling $450,000 and made unbudgeted transfers totaling more than $2.1 million to the District's reserves, which compromised the transparency of the District's finances. Additionally, three District general fund reserves, with balances totaling over $2.9 million as of June 30, 2015, were overfunded or potentially unnecessary. Further, the Board did not adopt a multiyear financial plan allowing it to identify developing revenue and expenditure trends, set long-term priorities and goals, avoid large fluctuations in tax rates and more effectively manage the use of fund balance and reserves.

District officials have not implemented adequate IT access controls for safeguarding personal, private and sensitive information (PPSI) in the financial system (FS) and student information system (SIS). We found unnecessary FS and SIS user accounts, including a built-in FS account that was not removed and other accounts for former employees, former long-term substitutes and current employees who do not need access. We also found questionable FS access and suspicious access attempts that were not detected and investigated by officials. In addition, we found unnecessary FS permissions for creating employee records and viewing employees' PPSI and unnecessary SIS permissions for changing student grades, assuming SIS identities and viewing students' PPSI. Unnecessary accounts and permissions increase the risk of unauthorized access and potentially harmful modification, use or exposure of PPSI. While we found no evidence of abuse of these accounts and permissions, our ability to review FS and SIS activity is limited due to deficiencies in the systems' audit logging capabilities. However, officials did not effectively use all information available in the audit logs to properly monitor FS and SIS use. This essential control would help to safeguard PPSI from potential unauthorized activity that may not be detected and addressed in a timely manner.

The City's charter requires that the Commissioner audit all claims. However, we found that the Commissioner did not audit claims in accordance with charter requirements. Instead, claims were reviewed and verified by the purchasing and finance departments at different stages in the claim payment process. Because the claims processing function was decentralized, with each department maintaining its own documentation, a complete claim voucher packet was not kept in one central location. Except for minor discrepancies, which we discussed with City officials, we found that the claims we reviewed were for appropriate City purposes, properly itemized, supported and approved before payment. However, we did not find any evidence that the Commissioner audited these claims, as required by the charter.

The Board did not properly oversee and monitor ambulance billing and collection. Moreover, the Board allowed two third parties to collect Village money. We identified charges for ambulance services that were inaccurate, unbilled, uncollected, unenforced and unreconciled. As a result, approximately $13,900 in potential revenue to the Village was not billed ($6,295), underbilled ($5,782) or remained uncollected ($1,830). This occurred, in part, because the Board had not adopted written policies and procedures for ambulance service billing and collection.