Because the Library's purchasing policy does not address procurements that are not subject to bidding laws, Library officials did not always seek competition when procuring goods and services. While the use of competition for such procurements is not legally required, the law does require a policy to be established; and best practices indicate that the use of competition helps ensure the most prudent use of taxpayer moneys. We found that Library officials paid a professional service provider and an insurance broker a total of $90,912 without soliciting competition. Further, Library officials did not solicit competitive bids when procuring services costing $134,076; and did not solicit competition when procuring goods and services from 10 vendors who were paid a total of $28,551. As a result, Library officials and taxpayers have limited assurance they obtained goods and services at the most reasonable cost.

The Board allowed budget line items to be routinely over-expended and budget transfers to be made after the end of the fiscal year, rather than throughout the year when needed. In addition, the Board did not properly audit all individual claims; we found instances of “confirming” purchase orders prepared after items were already purchased, claim vouchers approved by department heads after checks had been prepared, and a payment to a professional service provider without adequate documentation to support the claim. In addition, while the Court clerk does maintain up-to-date accounting records, the Justices and Village officials did not establish proper controls to ensure the Court clerk properly accounted for all issued parking tickets. For example, no one reconciled the issued tickets that the Court received from the Police Department with the entries recorded in the Court's financial software, resulting in eight tickets being unaccounted for with no supporting documentation. Further, the Justices did not provide adequate oversight of the Clerk's responsibilities, which were not adequately segregated. While the Justices review, sign and date the monthly bank reconciliations and reports prepared by the Court clerk, these functions alone do not adequately address the control weaknesses in the collection and recording of parking ticket fines. Furthermore, accountability for recording the Court collections is compromised because the Court clerk and assistant Court clerk share a username to access the Court's financial management software.

The Board and District officials did not effectively manage the District's financial condition by ensuring budget estimates were reasonable. The Board did not adopt realistic budgets based on historical costs and trends. As a result, the District overestimated expenditures by a total of $33.5 million from July 1, 2011 through June 30, 2014. Additionally, the District consistently appropriated fund balance that was not needed to finance operations, in effect exceeded the statutory limit on unassigned fund balance. Finally, District officials used surplus funds each year to finance reserves instead of funding reserves through the annual budget process, which would have been more transparent to taxpayers. The Board made transfers into its reserves totaling about $10.6 million from unrestricted fund balance without sufficiently informing taxpayers of its intent to do so.

The Board and District officials did not ensure that unexpended surplus funds were reasonable for the five-year period ending June 30, 2014. District officials planned to use a total of $17 million of fund balance during this period to finance District operations, an average of $3.4 million each year. However, they only used $2.4 million of the appropriated fund balance, or 14 percent of the total amount appropriated. In addition, the District overstated encumbrances by more than $6.5 million between the 2009-10 and 2013-14 fiscal years. As a result, the unexpended surplus fund balance exceeded the statutory maximum of 4 percent of the ensuing year's budget for each of the five years. In addition, although the District has a cellular telephone (cell phone) policy, officials do not have proper procedures in place to effectively manage cell phone use and acquisition. The District purchased cell service, cell phones and accessories totaling $45,877 during the audit period. We reviewed five payments totaling $28,741 and found that the District paid additional charges and fees of $3,277. Because the Board is not ensuring that officials adhere to the policy in place, the District incurred additional and unnecessary costs.

The Board has not taken sufficient action to initiate new projects and encourage the creation or expansion of new business, significantly affecting CIDA's viability. CIDA has undertaken no new projects since 2012. The Board has contracted with a consultant to, among other things, “create and maintain an outreach program whereby the Consultant can regularly solicit new, existing and potential businesses/companies to apply for the Agency's programs.” This Consultant was paid $1,800 each year for his services, for a total of $5,400 during our audit period. However, the Consultant does not provide any regular written documentation or reports to support any work he performs, and we could not find any indication that CIDA or the Consultant were working to bring in new projects. The lack of new projects has led to a significant decrease in revenues. However, the Board has not actively pursued new sources of revenue or taken sufficient action to reduce expenditures. The Board continues to budget for application and administrative fee revenues of $8,900, while interest revenue has been budgeted at $1,500, when actual revenue has not exceeded $85. In addition, CIDA's expenditures, mainly for consulting services, continue to increase. These practices have led to operating deficits in 2013 and 2014, totaling $10,097 and $10,583, respectively, and a decrease in fund balance from $50,476 as of December 31, 2012 to $29,796 as of December 31, 2014. We anticipate a 2015 operating deficit of $10,083, which would reduce fund balance to $19,713. Should these operating deficits continue, CIDA will deplete its fund balance by December 31, 2017, which would threaten its ability to continue operations.

We found that the Treasurer generally maintained adequate financial records. However, although the Board receives monthly financial reports from the Treasurer, the Board did not provide instructions or deadlines to the Treasurer for the preparing and filing of the annual financial report. As a result, the Treasurer has not submitted the required annual financial reports to OSC for the 2010 through 2014 fiscal years. In addition, the Treasurer does not provide the Board with bank reconciliations for review and there is no evidence that the Board reviews bank statements and/or canceled checks. Further, the Treasurer does not provide the Board with a budget-to-actual report monthly. Without receiving such reports, the Board cannot effectively monitor the District's expenditures and make budget modifications as needed. We reviewed budget-to-actual reports for fiscal years 2012 through 2014 and found that the District overexpended its budget in both 2012 and 2013. We also found that the Board does not review cash receipts, bank statements, canceled checks or bank reconciliations while conducting the annual audit, causing the audit to be ineffective.

Overall, the Board properly managed the Town's finances as it generally adopted realistic budgets. While the Town's operating funds have not recently experienced any significant year-end fund balance deficits, the Board could improve its monitoring of the Town's financial condition, in particular the town-outside-village general and highway funds.

Town officials' failure to establish comprehensive written policies and procedures for processing payroll and maintaining leave time accruals resulted in a lack of segregation of duties and sufficient compensating controls. As a result, we found that four employees in 2013 and six employees in 2014 did not receive the correct gross pay. These employees had combined overpayments totaling $4,759 and combined underpayments totaling $852. In addition, State and federal income taxes were not withheld in accordance with employees' withholding allowance certificates and the proper amounts were not deducted for health insurance premiums from any of the employees' gross pay during our audit period. The Town also lacked comprehensive policies and procedures for water and sewer charges resulting in an overall lack of segregation of duties and compensating controls. As a result, we identified significant internal control weaknesses over billing, collecting and enforcing water and sewer charges. We found that nine of 50 billings (18 percent) were incorrectly calculated, resulting in four customers being underbilled by $343 and five customers being overbilled by $419. The Town was also not properly assessing penalties for delinquent accounts and all delinquent accounts were not properly relevied. As a result, the Town did not realize all potential revenues and did not properly enforce all delinquent accounts. Town officials also did not establish an adequate system of internal controls over transfer station cash receipts. We found that 23 transfer station tickets, valued at $315, were unaccounted for. In addition, we were not able to trace collections totaling $1,870 for 123 transfer station tickets that were recorded as sold to a corresponding deposit.

The Board did not ensure the Supervisor maintained up-to-date, complete and accurate records. Although the Supervisor provided the Board with accurate monthly budget-to-actual reports, the balance sheets included inaccurate account balances. For example, the July 31, 2014 highway fund balance sheet overstated liabilities by more than $76,000 because the Supervisor had incorrectly recorded a receipt. Further, bank reconciliations contained outdated deposits in transit and inaccurate transactions, including journal entries that should have been removed to reflect the actual cash balances in the accounts. Moreover, the last time the Supervisor filed the annual financial report was for the 2010 fiscal year and the tax levy limit calculation has never been filed since the inception of the property tax cap law for the 2012 budget year.

The Board needs to improve internal controls to effectively protect the Town's computer system and data. Specifically, the Board needs to review user access and restrict administrative rights to those who need such rights to perform their jobs. The Board also has not provided Town personnel with a copy of the acceptable computer use policy. Furthermore, the Board has not developed computer security and disaster recovery plans, and has not established a breach notification policy or a comprehensive inventory policy for all hardware and software. As a result of these weaknesses, there is an increased risk of loss of critical data and interruptions to Town operations.

Cash receipts were not properly safeguarded and accounted for in the Treasurer's office. We identified weaknesses over the collection, recording and deposit of cash receipts. The Treasurer and her Deputy did not issue duplicate receipts for all transactions where no other evidence of receipt was available, no one completed a proper reconciliation of receipts to deposits and the Board did not provide the Treasurer with a secure location to keep receipts until deposit. As a result, there was a cash shortage of $2,167 in real property taxes over a two-year period. The missing tax receipts went undetected because the Treasurer did not properly reconcile real property taxes and the Board did not audit the Treasurer's records.

The Clerk-Treasurer did not complete accurate bank reconciliations. Numerous bank account balances did not reconcile to their corresponding cash balances in the accounting records and had total differences ranging from $4,437 to $6,514 per month. In addition, interfund loans were not accurately recorded which caused due to other fund accounts to exceed due from other fund accounts by $2,867 for the last three fiscal years. In addition, the Clerk-Treasurer filed the AUD late for 2011-12, and, as of August 31, 2014, had not filed the AUD for 2012-13 or 2013-14. Lastly, the Board did not audit, or have audited, the Clerk-Treasurer's records for 2012-13 and 2013-14. As a result, there is an increased risk that errors in the accounting records or mishandling of Village funds will occur and that the Board, taxpayers and other interested parties may not be able to assess the Village's financial operations and financial condition.

The Board did not properly plan and provide oversight and management of the Village Hall building project.

The purpose of our audit was to review the projected cost and/or energy savings achieved by the energy performance contracts (EPCs) entered into by the five school districts for the period June 1, 2005 through November 10, 2014.

The District did not award accurate LOSAP credits because District officials did not award the appropriate number of points to volunteers for participation in department responses and accurately record volunteer activities. We identified discrepancies in the activities recorded and points awarded by the District for nine of 10 volunteers reviewed. As a result, two volunteers received one year of service credit and earned a defined contribution of $700 in 2014 to which they were not entitled. For the remaining seven volunteers, who were awarded points incorrectly, the inaccuracies did not affect the service credit awarded to those participants.

The Board did not effectively manage the Town's budget. The Board-adopted budgets for the highway fund were not structurally balanced, as they used non-recurring revenues to fund recurring expenditures. In the general fund, the Board also used non-recurring mortgage tax revenues to fund recurring expenditures, as well as to fund non-recurring expenditures and to build fund balance. The Board developed general fund budgets before learning how much the Town would receive in mortgage tax revenues, but did not amend the budget once it learned how much these revenues would be. Because the Board did not make budget amendments when necessary, multiple budget line items were overexpended in both the general and highway funds. This caused both funds' overall budgets to be overexpended in 2013, and the highway fund budget to be overexpended in 2014. Additionally, the Board did not establish a goal for fund balance levels and did not monitor available fund balance; as a result, it planned to appropriate fund balance in the highway fund which was not available. Lastly, the Board did not fund its long-term plans, instead relying on unplanned revenues to implement them, or – in the case of the Town's vehicle replacement – deferring implementation due to lack of funds.

The Board and Town officials have not developed adequate policies and procedures or financial plans to govern budgeting practices. Due to a lack of budgetary guidance, Town officials adopted budgets which resulted in erratic swings in the tax rate. In addition, although the Town has four reserve funds, the purpose and funding levels of the reserves have not been established. Finally, the Board and Town officials have not formally established a multiyear financial plans.

We found deficiencies in the IT controls over the Village's electronic data and computer resources including inadequate preparation for responding to IT security incidents, unnecessary user accounts, excessive user permissions to financial software, and inconsistent understanding of IT security responsibilities. As a result, Village IT assets are at risk of attacks that could lead to unauthorized access to or disclosure of sensitive information, inappropriate modification or deletion of critical data, or interruption of service availability. In fact, the Village experienced two IT security incidents in 2014. In addition, the Village has not established a process for staying current on water system cybersecurity threats. Village officials do not receive alerts to such threats from either the U.S. Department of Homeland Security's Industrial Control System Cyber Emergency Response Team or the Water Information Sharing and Analysis Center.

The Board and District officials need to improve their oversight of the District's budget process to adequately manage the District's financial condition. The District reported year-end unrestricted fund balance at levels that essentially complied with the 4 percent fund balance limit for fiscal years 2011-12 through 2013-14. This was accomplished, in part, by appropriating fund balance and funding reserves at year end. Over the past three years, District officials' appropriated a total of nearly $24 million of fund balance, which should have resulted in planned operating deficits each year. However, because the District overestimated expenditures in its adopted budgets, it experienced large operating surpluses in 2011-12 and 2012-13 and did not use the appropriated fund balance to finance operations. From 2011-12 through 2013-14, total actual revenues exceeded expenditures by as much as $3.7 million, while only $1.8 million of the nearly $24 million of appropriated fund balance was used to finance operations. We also found that District officials did not maintain complete and adequate fuel inventory records to safeguard and account for its fuel. The head groundskeeper performed a monthly reconciliation of District fuel purchase and use records with the actual fuel on-hand. However, discrepancies were not investigated. As a result, the District could not account for 1,876 gallons of gasoline (more than 5 percent of the gasoline purchased), valued at approximately $5,628.

The District reported year-end unrestricted fund balance at levels that essentially complied with the 4 percent fund balance limit for fiscal years 2009-10 through 2013-14. This was accomplished, in part, by appropriating fund balance totaling more than $20 million to fund ensuing years' budgets and using surpluses to fund reserves. The appropriation of fund balance should have resulted in planned operating deficits. However, because the District significantly overestimated expenditures in its adopted budgets, it experienced large operating surpluses, and, therefore, none of the appropriated fund balance was used to finance operations. In effect, the District kept year-end fund balance levels artificially low and accumulated money that could have been put to productive use. Additionally, because District officials did not include the funding of reserves in the annual budget, the District's use of taxpayers' money was not sufficiently transparent.

The Justices did not require the clerk to perform monthly bank reconciliations or accountabilities for their review to ensure all collections were accurately accounted for and any discrepancies were promptly identified and corrected. We performed reconciliations of the Justices' bank statements and determined that, as of December 4, 2014, Justice Lemen and Justice Mahoney both had small overages. Additionally, we found former Justice Kemp did not report unidentified money totaling $2,896 to the Justice Court Fund (JCF) on his final report, as required, or close his official bank account at the end of his term. We also found that the Justices did not routinely submit monthly reports to the JCF and did not remit more than $151,000 collected to the Supervisor in a timely manner. Furthermore, none of the Justices nor the clerk adequately monitored defendant cases with unpaid fines and surcharges so that appropriate action could be taken when these fines and fees were not paid in a timely manner. Finally, the Board did not conduct an annual audit of the Justices' books and records as required by New York State Town Law.

During our audit period, the Library collected approximately $49,000 in over-the-counter cash receipts from fines, fees and donations. We were unable to determine if all collections were recorded and deposited in a timely manner and intact. This was because the Board has not established policies and Library officials have not documented procedures for handling and recording over-the-counter cash receipts and waiving fines and fees. As a result, the Library did not always ensure that adequate documentation was maintained to verify that all collections were recorded and deposits were made timely and intact.

The Clerk-Treasurer receives the vendor invoices by mail and prepares the claim packets. The Clerk-Treasurer consecutively numbers all claim packets and lists them on an abstract. He submits the claim packets to the Board for review at the regularly scheduled Board meetings. Each Board member reviews the individual claim packet and signs the claim to document his or her review. Board resolutions approving payment of claims are then passed and documented in the meeting minutes. Except for minor discrepancies, which we discussed with Village officials, we found that the Board conducted a complete and thorough audit of the claims and that claims were adequately supported and for legitimate Village purposes. We commend Village officials for designing and implementing this system of controls over the approval and payment of claims.

The Board did not implement adequate controls over the Department's financial activities. Although the Board has adopted Department bylaws, we found them to be outdated and inadequate. The bylaws do not specifically detail the Board's responsibilities and the Treasurer's duties. In addition, the guidelines did not adequately segregate or provide for oversight of the Treasurer's duties. Further, the Board did not adopt a code of ethics or policies and procedures for financial operations such as cash receipts and disbursements, procurement or information technology. As a result, the Board did not provide adequate oversight of Department financial activities and the Treasurer did not have sufficient guidance to properly perform her duties.

From January 2010 through December 2014, the District purchased 106,648 gallons of diesel fuel and 139,284 gallons of gasoline at a total cost of $779,682. District officials did not purchase fuel in the most economical manner possible. Had the District purchased fuel from vendors listed on the State contract, it could have saved $79,601. District officials also did not maintain complete and accurate fuel inventory records to safeguard and account for fuel. As a result, the District could not account for 17,560 gallons of gasoline (nearly 13 percent of the gasoline purchased), valued at approximately $54,850. In addition to maintaining the fuel for its own use, the District permitted another fire district and two ambulance companies to use its fuel, without the benefit of a written agreement. The District's poor records also resulted in billing errors and uncollected amounts from these units that cost the District approximately $15,000. Finally, the District did not ensure compliance with its Board-adopted vehicle use policy, resulting in the District having no assurance that fuel was used only for legitimate District purposes. This included more than 10,000 gallons of gasoline, valued at $31,277, used by a Chief to commute to and from his place of employment in New York City. We also found that the Board has not established a thorough claims audit process to ensure that all cash disbursements are adequately supported and for valid District purposes. The Board also did not ensure that the Treasurer disbursed District money only after the Board directed her to do so by resolution. As a result, the Board did not properly audit any of the 1,474 claims, totaling $4,386,641, paid during our audit period. In addition, we identified questionable charges for out-of-state travel and local meals on the District's credit cards totaling $26,809. Four Commissioners reimbursed the District a total of $1,701 for personal purchases made on the District's cards.