We found the County does not track maintenance and repairs by bridge, which could make it more difficult to determine when it is more economical to replace rather than repair a bridge. Further, for the nine available and completed fiscal years from 2002 through 2011, the County had an average of 21. We examined all 89 flags issued during the period 2007 to 2011 to review for timely responses and/or actions on behalf of the County. Of the 89 flags reviewed, County officials could not produce sufficient response documentation for 72 flags. Therefore, we could not determine if the County had responded to these flags in a timely manner.

We found that the County does have a written plan for bridge maintenance; however, it has not been formally approved by the Legislature. This plan includes cyclical maintenance and corrective action programs. Additionally, we found the County does not track maintenance and repairs by bridge, which could make it more difficult to determine when it is more economical to replace rather than repair a bridge.

We found that the County has a written plan for bridge maintenance and repairs. During our audit period, the County maintained average bridge ratings and a consistent level of funding for bridge maintenance, repairs, and replacements. However, we found the County does not track maintenance and repairs by bridge, which could make it more difficult to determine when it is more economical to replace rather than repair a bridge.

While the County does not have a written plan in place, it has implemented practices that have served to improve bridge ratings over an extended period of time and have maintained consistent ratings over the past 10 years. The County has reduced the number of deficient bridges in recent years, primarily by replacing and completely renovating six bridges each year. Additionally, the County does not track all maintenance and repairs by bridge, unless the bridge is being completely replaced or rehabilitated.

The Board did not provide sufficient oversight of the financial duties performed by the former Treasurer, allowing the apparent misappropriation of over $59,000 in Village funds without detection. This included over $46,000 of inappropriate cash disbursements and almost $13,000 of inappropriate payroll payments. This occurred because the Board allowed the former Treasurer to perform all cash disbursement duties with no oversight. The Board did not review the bank statements or the bank reconciliations. Further, the former Treasurer did not maintain accurate financial records. In addition, the Board did not audit and approve claims prior to payment and did not provide for an audit of the former Treasurer's financial records for the fiscal years ended February 28, 2011 and February 28, 2012. Further, the Board did not require the former or current Treasurer to provide monthly financial reports for monitoring cash flow and fund balance and, therefore, was unable to adequately manage the Village's operations and fiscal health. Finally, although the Board did not pass a resolution establishing a petty cash fund, the former Treasurer issued and cashed 36 petty cash checks that averaged approximately $340 each.

The District does not have adequate financial policies and procedures. While the Board has adopted purchasing and code of ethics policies, it has not adopted an investment policy, as required by statute. The Board also has not ensured that procedures are in place for financial recording and reporting. We found that the Treasurer did not submit monthly financial reports to the Board, but has filed the required annual financial report as of fiscal year 2011 with the OSC. The Board does authorize each claim for payment and indicates its approval by affixing each member's signature on the warrant. Finally, the Treasurer was not maintaining accurate cash balances for the District's checking and savings accounts.

We found that the Town could potentially save as much as $7,000 annually if it used assets that it already owns to process and print payroll checks in house rather than using a contractor to process payroll. In addition, Town officials cannot identify which of the two clerks performed a transaction because their system identifications were identical. Also, we identified 36 cases that were deleted from the Court's system; the reasons for the deletions were not documented. Further, 166 cases were not reported to the State Comptroller's Justice Court Fund. The Town also did not implement a comprehensive data back-up procedure. In addition, we found inappropriate use of the Town's computers at the highway department. Finally, Town officials did not ensure that user access rights were terminated upon separation from service, and users did not log off the system when they were not using it.

District officials have established adequate controls over the claims processing function that allow claims to be audited in a timely manner and ensure the claims are properly supported. Our examination revealed only minor deficiencies, which we discussed with District officials.

The City's financial condition has deteriorated as a result of the Council's decisions when developing and adopting annual operating budgets and its failure to appropriately monitor financial operations. At June 30, 2009, the City's total unexpended surplus for its major operating funds (general, water and sewer) was slightly over $6 million. By June 30, 2012, the City's total unexpended deficit for these major operating funds was more than $15 million. From the 2008-09 through the 2011-12 fiscal years, these operating funds experienced total combined operating deficits of almost $18 million primarily because the Council adopted budgets that over-estimated revenues and under-estimated expenditures. As a result, City officials relied on interfund advances, budget notes and long-term financing to fund operations. In addition, City officials have not formalized policies and procedures over Department of Parks and Recreation cash collections. As a result, personnel have developed their own procedures which may not be consistent with good internal control practices.

County officials have not established policies and procedures to monitor the Microenterprise Development Loan Fund (MDLF) Program. Although the County's contract with the Business Development Corporation (BDC) requires quarterly and annual reporting, BDC provided untimely and insufficiently detailed activity reports. County officials did not have sufficient information to address delinquent balances for nine loans totaling $24,847. For the Children with Special Needs program, we found that client files were not always available or complete. We reviewed the files for the 224 children that were available and found that the County did not maintain one or more pieces of required documentation in the files for 19 of these children, for whom the County paid claims totaling $161,482. We also reviewed 16 transportation claims totaling $100,566 and found exceptions with five claims totaling $85,654. Finally, the Legislature has not established policies and procedures relating to the security of data and assets, including user access, a formal disaster recovery plan, and IT security awareness training for users of the County network.

The District's budgets from fiscal years 2008 through 2012 were unrealistic. Total expenditures during this period were approximately $777,000 less than appropriations. These unrealistic budgets caused total fund balance to increase significantly. At the end of 2012, total fund balance was nearly double the ensuing year's appropriations, and total fund balance is projected to remain above 100 percent of the subsequent year's appropriations through 2031. The District continues to raise taxes unnecessarily even though it has excessive fund balance. These actions are not in the best interest of District taxpayers.

During the four-year period 2009 through 2012, the Board did not prepare District budgets in the format prescribed by OSC or prepare budgets based on reasonable estimates. Due to the continual overestimating of expenditures, the District generated operating surpluses totaling $2,520,795 from 2009 through 2012. In addition, the District did not calculate its statutory spending limits correctly for 2009 through 2013, resulting in budgeted appropriations that exceeded the statutory limit by as much as $21,500 in 2010, 2012, and 2013. Finally, the Board did not receive complete and accurate financial information from the Treasurer. Therefore, the Board did not always have the necessary information to effectively monitor the District's budget.

The Board did not develop accurate budget estimates for the general fund and did not properly monitor and control actual activity against those estimates. The Board has over-estimated revenues for the years 2008 through 2012 by an aggregate of more than $126,000, which is more than a 12 percent average shortfall. As a result, at the end of 2012 the Town had a fund balance deficit of $3,586. In addition, Town officials cannot ensure that cash disbursements are only made for proper Town purposes. While the Board reviewed all claims that were presented to it for audit, it approved claims totaling $6,183 that did not describe the goods purchased clearly or at all. Further, because Town officials have not established controls over fuel inventories, no one can be sure that fuel purchased by the Town is used only for Town vehicles and equipment.

The Board has appointed FREE to serve as the designated representative for the Treasurer of the School. FREE performs virtually all aspects of the School’s financial operations, making monitoring even more essential.

School officials routinely purchased school equipment and furnishings from a limited group of four vendors that were affiliated with one another. The required number of quotes was not always obtained, and quotes were sometimes dated after the purchase was made. School officials did not document verbal quotes, making it impossible to verify that the lowest quote was used or that the School paid the correct amount. School officials also received quotes for school equipment and furnishings from vendors that did not specialize in such items, and did not attempt to identify more suitable vendors that could have offered more competitive prices. As a result, we question the prudence of $383,390 in purchases which the School likely could have obtained at lower prices. In addition, some of the purchased items were in fact resold to the School after an affiliated vendor purchased the items online and marked up the price. Had School officials purchased these items either directly from the original vendor or through State contract, they could have saved $5,220 on total purchases of $54,940. We also identified $5,500 in contractual discounts due to the School from its vendor of student information system software and training. Finally, The Director of Operations does not ensure all student information is recorded accurately prior to billing their school districts, and does not verify the accuracy of the year-end reconciliation of the School's student information system with billings, which should identify any moneys that the School owes to the resident districts (over-billings) or vice versa (under-billings).

During 2011, the County paid $230,686 for inmate healthcare services for inpatient and outpatient care. We reviewed 59 vouchers totaling $93,038 for inmate healthcare services and found discrepancies with 18 claims totaling $88,540. These discrepancies occurred because County officials did not have adequate procedures to review invoices for inpatient hospital services provided to County inmates and verify that the correct Medicaid Diagnostic Related Group (DRG) rates were used.

We found that the Justices, and the Court Clerk, did not prepare monthly accountabilities of Court assets and liabilities and former Justices did not properly close out their accounts. Our audit disclosed that one of the former Justices had a shortage of $1,026 and the other former Justice has unidentified funds of $699. In addition, pending tickets were not always enforced in a timely manner and dismissed tickets were not always reported to the JCF. Therefore, the Town may not have collected all fines and fees to which it is entitled. Finally, the Board did not conduct an effective audit of the Court's records and did not properly segregate the Court Clerk's duties or establish compensating controls.

The Board has not properly monitored budgets and managed fund balance in the general fund. The Board has consistently relied on fund balance to fund operations, which has depleted Town resources. Although fund balance has rebounded some in 2012, there has been a steady decline of 69 percent in reported unassigned fund balance since 2008. Further, the Board did not approve budget amendments for the 2012 budget until January 2013, one month after the budget lapsed.

The Justice was absent for the majority of our audit period; during this time, the Court operated with three temporarily assigned Justices. We found that important recordkeeping functions were not performed to ensure accountability over the Court's records. Specifically, the Justice and assigned Justices did not review bank statements or reconciliations, and did not review system activity to detect and correct errors. We also found that assigned Justices did not maintain separate bank accounts to track incoming Court moneys, and the Justice and assigned Justices did not personally submit their monthly reports to JCF or ensure that the monthly reports were submitted timely to OSC. In addition, the Board does not ensure that a timely annual audit of the Court's books and records is performed.

The District procured goods and services in accordance with its policy and the statutory requirements. We reviewed 36 claims totaling $1,199,894 that were subject to the District's procurement policy during the period July 1, 2011 to January 31, 2013, and found only minor issues which were discussed with District officials.