The Greene County Industrial Development Agency (GCIDA) entered into contracts in which we believe former GCIDA Board members had prohibited conflicts of interest. Members of the Board served conflicting roles with businesses that received benefits from GCIDA. This includes lease and PILOT agreements related to the construction and renovation of a ski facility; a lease and PILOT agreement relating to the construction of an aircraft component assembly facility; and the sale of land, a line-of-credit and the issuance of bonds with a bank. GCIDA had formal criteria for selecting which firms and businesses received sponsorship and economic development incentives. However, the Board cannot document that project incentives were consistently applied when approving projects because they did not prepare formal documented cost-benefit analyses. Finally, GCIDA does have a process in place to monitor employment goals. However, it does not have a policy that would allow it to effectively hold businesses accountable when they do not comply with employment reporting requirements or meet specific employment goals. Four of 10 businesses receiving GCIDA benefits that we reviewed have not met their employment goals and one business did not comply with employment reporting requirements. In addition, six of 10 PILOT agreements reviewed did not have a recapture clause.

In 1996, the Putnam County Industrial Development Agency (PCIDA) Board established criteria for approving projects, and for evaluating and recapturing benefits from projects that fail to meet their goals. However, the policy has not been evaluated since, and therefore does not reflect changes made by the Board to the recapture provisions that the Board should follow. PCIDA officials do not have project approval criteria that is specific to the County, and they approve individual projects despite a lack of information such as the additional police or emergency services required, the number of existing jobs or a cost-benefit analysis. Officials also do not conduct annual visitations to businesses to determine if projects meet their goals or recapture benefits when they do not. Officials also do not obtain sales tax exemption or capital investment amounts annually, and therefore cannot determine if projects are meeting their related goals or accurately report this information to the Office of the State Comptroller. As a result, there is an increased risk that businesses will receive unnecessary financial assistance and that the businesses will not provide the public benefits that have been promised to the County and local jurisdictions.

Internal controls in the payroll department were generally operating effectively. We tested payroll payments for all 54 employees, including full-time, part-time, seasonal and temporary employees, to determine whether they were paid Board-approved wages. We found that employees were compensated accurately but that leave accrual records were not properly maintained. We tested the leave time used by all six highway department employees for whom leave records were maintained and found minor discrepancies that we discussed with Town officials. Because the Town did not maintain leave accrual records for other employees, Town officials have no way of determining the accuracy of time for vacation, sick and personal leave accruals.

The Town maintains two above-ground fuel storage tanks at its highway facility; a 1,500-gallon tank for diesel fuel and a 500-gallon tank for gasoline. From January 2012 through October 2013, the Town purchased 24,000 gallons of fuel costing approximately $80,000. The Town does not maintain perpetual inventory records to show the amount of fuel remaining in inventory at any given time, and it does not take periodic physical inventories for reconciliation purposes. We performed an analysis of the Town's fuel purchases and usage records. We determined that approximately 7,100 gallons valued at $23,500 were unaccounted for. We also found apparent errors in the fuel usage records. The Town has not taken measures to provide physical security over fuel. There are no procedures in place to record the distribution of fuel shed keys. Also, because the distributed keys can be duplicated, there is no assurance that an inventory would identify all of the keys that exist. Additionally, once the shed is opened, there is unrestricted access to the fuel tanks.

A significant amount of Town resources are being inappropriately reported and sequestered in the capital projects fund because the Board and Supervisor did not close completed capital projects and transfer the remaining money to the appropriate operating fund. The Supervisor is accounting for $913,000 remaining from a “Host Community Fee” received in 2007 in the capital projects fund. Town officials indicated that they had not established future plans for this cash. Moreover, the Supervisor is also accounting for park operations in the capital projects fund, rather than the general fund. As of September 30, 2013, the capital projects fund held $39,600 in cash from park operations. These cash balances, which total $953,000, should be recorded in the general fund-townwide, where they can be used to reduce real property taxes and finance operations.

We found that, except for minor discrepancies that we discussed with District officials, all customers were accurately billed, penalties were calculated correctly, and late fee waivers and billing adjustments were generally made in accordance with District policies and properly authorized by a designated official.

The Board had not adopted comprehensive written policies and procedures providing guidance and internal controls over departmental cash receipts. Consequently, we found that $42,031 in cash receipts had inadequate supporting documentation of the collections and $11,429 in cash receipts were not remitted to the Business Office and deposited into District accounts in a timely manner. In addition, we found that open swim program cash receipts were not properly accounted for, were substituted by the open swim program coordinator with personal checks and were not all remitted to the Business Office for deposit. In addition, internal controls over the District's information technology (IT) system were not appropriately designed or operating effectively. We found that users were granted access to functions of the financial software applications that they did not need to fulfill their day-to-day job responsibilities. In addition, although the District's technology controls policy designates the Superintendent with the responsibility of assigning access rights (administrative rights) to the financial application, we found that the School Business Executive has been granted administrative rights to the financial application. Furthermore, audit logs were not generated and reviewed by someone independent of the Business Office's operations.

The District reported $195,355 of unexpended surplus fund balance remaining as of June 30, 2013. Given the size of the District's operations this is a dangerously low level. In addition, approximately $5.3 million in workers' compensation reserve funds were inappropriately used to fund other unrelated general fund operating costs. The District's last multiyear financial plan was prepared in June 2012, which included information on past financial trends and projections for revenues and expenditures. The financial plan also included a history of fund balance, which has substantially dwindled over the past six fiscal years. We also found that District officials did not establish adequate safeguards over mobile devices, and that District employees did not use mobile devices in accordance with the District's acceptable-use policy. For example, on 23 of the District's 40 mobile devices we found indications of personal use. We also found that 25 devices had minimal to no discernible use for District purposes and were used predominantly for personal use, or not at all.

In recent years the District has struggled with fiscal challenges due to a deteriorating financial condition. District officials have adopted realistic budgets and its spending did not exceed the budget. However, they relied heavily on appropriations of fund balance in the budgets from 2010-11 through 2011-12. As a result, by the end of 2011-12, the District's unexpended surplus funds had declined to a deficit of $1,157,820. By the end of 2012-13, the District was able to increase the unexpended surplus funds to $1,127,047 (.8 percent of the ensuing year's appropriations). Although this is an improvement from the prior year, the District has very little cushion for managing unforeseen events. To meet short-term cash flow needs, the District borrowed at least $10 million each year, incurring about $150,000 for interest costs in the 2012-13 fiscal year. While the Board has attempted to address the District's declining financial position, it has not developed a multiyear operational plan to provide a framework for future budgets and facilitate management of financial operations.

We found that the Board generally does not provide adequate oversight of the Company's financial activities. There was no evidence that the Board or Company membership adequately reviewed or approved all bills/claims prior to payment. The Treasurer did not provide the Board with monthly or annual reports and was not responsible for receiving and maintaining custody of all Company funds. Furthermore, the Treasurer did not prepare a budget or cash flow document to guide annual operations.

The Board has not established adequate policies and procedures to ensure that the Treasurer prepares monthly bank reconciliations. We found that, while the Board established some controls, they lacked some key components to ensure that financial activity was properly recorded and reported to safeguard District moneys. Specifically, both the former and current Treasurer filed the District's annual update documents (AUDs) late for the past five years and they failed to complete monthly bank reconciliations. We prepared bank reconciliations as of December 31, 2012 and August 31, 2013 and noted no material discrepancies.

The Board did not develop policies or procedures for budgeting practices and, as a result, repeatedly adopted budgets with unrealistic estimates for revenues, expenditures and appropriated fund balance. These inaccurate budgets caused significant budget variances and resulted in unused appropriated fund balance; fund balances were not actually reduced at the levels represented to taxpayers in the adopted budgets. The Board also has not adopted, reviewed, updated or enforced adequate financial-related policies to ensure Town resources are protected. The financial duties in the Supervisor's Office were not adequately segregated and there were no effective compensating controls. Additionally, the Board has not entered into detailed written agreements with the payroll processor and bank to ensure that the Town's information and resources are adequately safeguarded.

Although the former Director properly accounted for some Department funds, she did not properly account for funds associated with the Center's operations. The day before the former Director officially retired, $21,526 of unsecured cash ($19,732) and checks ($1,794) was found in a Department file cabinet. Of this amount, $4,003, was in a sealed envelope and appeared to be ready to be remitted to the Town Comptroller. There was no indication that the remaining $17,523 would be remitted to the Town Comptroller. The former Director opened an unauthorized bank account in 2004 which the Board was not aware of, deposited Center funds in the account and wrote questionable checks from that account for Center activities. In addition, the former Director paid for overnight trips for Center members with her personal credit card and subsequently wrote checks to her husband for reimbursement of the payments, for which the former Director's husband was overpaid approximately $3,743. The former Director and her husband also did not pay $4,657 for the trips which they participated in. The former Director did not issue press-numbered receipts or properly account for moneys received. Payments were made without supporting documentation, and items were purchased that do not appear to have been used for Center activities. These activities occurred because the Board did not provide adequate oversight of the Department's financial activities.

We found that the Board has not adopted a policy and Town officials have not developed procedures to govern the level of unexpended surplus funds to be maintained. Additionally, the Board has no policy for developing accurate budget estimates. As a result, the Board has underestimated revenues in its town outside-village funds over the last three years totaling $186,968 in the general fund and $339,662 in the highway fund. The Board also overestimated expenditures in its town outside-village funds for the last three years totaling $49,557 for the general fund and $183,154 for the highway fund. Because the Board did not adopt accurate and realistic budgets and monitor them against actual results of operations the Town has accumulated excessive fund balances in the town outside-village funds, 115 percent in the general fund and 93 percent in the highway fund for the ensuing years' appropriations. In addition, the Town comingled cash for various funds but did not account for cash separately by fund until the year-end financial reports were prepared. Therefore, at the end of 2011 the Board decided to transfer an additional $55,000 from the highway town-wide fund to the capital project fund and the Board appropriated $30,000 of non-existent highway town-wide fund balance in its 2013 budget to help pay for expenditures As a result, as of December 31, 2012, the highway town-wide fund had a total deficit fund balance of $36,491. Finally, there were no policies or procedures for the establishment, use and record keeping requirements for reserve funds and the Town could not provide any documentation to indicate that any of the reserves were properly established pursuant to General Municipal Law.

We found that the Board generally did not provide adequate oversight of District financial activities. The Board did not audit the Treasurer's financial records or provide adequate evidence that claims were audited prior to payment. The Treasurer has not filed the required annual financial report with OSC since 2009. The Treasurer also did not receive or review cancelled checks (or check images) and did not prepare monthly bank reconciliations to determine whether any differences existed between bank records and his check register.

We found that the Board does not provide adequate oversight of District financial activities. Although the Board has adopted procurement, investment and code of ethics policies, it did not ensure there were proper controls over cash disbursements or ensure the Treasurer was performing her duties properly. The Board reviews the claims at biweekly Board meetings. However, because it is not reviewing monthly bank statements or bank reconciliations, the Board cannot verify if it is approving all claims for payment. In addition, it cannot determine whether there are any discrepancies between bank and book cash balances. In addition, the Treasurer has not filed the annual update document with the State Comptroller's Office for the years 2009, 2010, 2011 and 2012.

The purpose of our review was to determine whether the County Treasurer’s controls are adequate to ensure that financial activity is properly recorded and reported and that Court moneys are safeguarded for the period January 1, 2011 through January 1, 2014.

We found that the Board generally provides adequate oversight of District financial activities. However, the Board did not annually review and update its adopted procurement policy. Currently, the District's procurement policy requires officials to obtain three written quotes for purchases costing from $5,000 to $10,000, but does not address the process to be followed for purchases between $10,000 and $20,000. The District annually spends approximately $9,000 for natural gas and $13,000 for electricity. We found that the Board was not soliciting proposals for either of these purchases. We reviewed natural gas and electricity bills from September 2012 through September 2013 and compared the rates the District paid with rates charged by a local energy cooperative. We estimate that the District officials could have saved approximately $4,000 on their electricity bills if they had obtained quotes for these purchases.

The Board did not ensure that fuel supplies in the parks department were adequately safeguarded and properly accounted for. In addition, the fuel monitoring system in the highway department is not being used to its fullest capabilities. Employee and vehicle information are not identified within the system and the odometer reading is not a required entry when dispensing fuel. The Town paid approximately $1,870 more than necessary for unleaded fuel purchased by the parks department. We found no evidence of inappropriate fuel use in either department. In addition, the Board has not established a fleet management policy or conducted a needs assessment to determine if the vehicles in the Town's fleet are being utilized effectively. We found that not all vehicles are being fully utilized, and the Town may achieve savings by considering other alternatives, such as reimbursing employees for mileage, or establishing a pool of vehicles to be shared by multiple departments rather than assigning vehicles to individual employees.

Based on the results of our review, we found that most of the significant revenue and expenditure projections in the tentative budget for the general, sanitation, water and sewer funds are reasonable. The tentative budget did not include a tax overlay or provisions for potential salary increases from contract settlements. In addition, the tentative budget includes revenue that is not achievable. These issues could cause the Village to become fiscally stressed or require them to increase taxes.