The Board's procurement policy is not comprehensive. Although the Board's procurement policy identifies certain responsibilities and functions of School officials involved with the procurement process, it does not identify who is responsible to obtain, review and award procurement selection from competitive bids, requests for proposals (RFPs) or written/verbal quotes. Further, the policy requires a “reasonable effort” to obtain three quotes for the purchase of goods and services that are expected to exceed $10,000 annually. This language can be interpreted in many ways, since reasonable effort is subjective. Moreover, the policy does not define what type of quotes (written or verbal) will be obtained for purchases exceeding $10,000 annually, and does not identify the use of competitive bidding or RFPs. School officials did not always competitively procure goods and services. We reviewed payments made to 26 vendors totaling $306,935 to determine whether School officials used a competitive process, such as competitive bids, RFPs or written/verbal quotes to acquire goods and services. The School made payments to 12 vendors totaling $272,884 that either exceeded the policy's $10,000 threshold, or were payments in accordance with a contract that exceeded the $10,000 threshold and, therefore, required a reasonable effort to obtain three quotes. However, the School did not obtain required quotes from six vendors paid $112,611 (or 41 percent) for goods and services.

The purpose of our audit was to determine whether FFI tax money was spent in accordance with special act legislation, city charters or other applicable laws, for the period January 1, 2014 through October 5, 2016.

We found that tax collections were recorded properly and deposited intact but were not always remitted to the appropriate parties in a timely manner. During the 2017 and 2018 tax collection cycles, the Clerk did not make weekly payments to the Supervisor or monthly payments to the County Treasurer as required. For example, in 2017 the Clerk did not make payments to the Supervisor in the first, third or fourth weeks of January even though there were tax collections during these weeks. In 2018, the Clerk made weekly payments to the Supervisor, but these payments did not include interest and penalties collected as required. Instead, the Clerk remitted interest and penalties to the Supervisor with one single payment at the end of the collection cycle. In a similar fashion, the Clerk did not make monthly payments to the County Treasurer as required. Instead, the Clerk remitted collections due to the County with two checks: the first dated in March and the second dated in April. In addition, cash receipts totaling $238,321 were deposited between one and 15 days past the required date of deposit. Finally, the Board did not perform an annual audit of the Clerk's records, as required.

District officials did not seek competition for the services of 16 of 20 professional service providers who were paid $1.42 million. District officials sought competition for three service providers paid $144,297. The remaining service provider paid $380,169 was procured through the New York State Education Department. We also found that the District did not have written agreements signed by the Board or Board resolutions for eight professional providers who were paid a total of $739,464 during the audit period. Officials also did not obtain quotes for goods and services for 19 purchases totaling $70,634, as required by the District's purchasing policy. Finally, officials did not ensure that purchases of goods and services totaling $22,899 were made with prior approval, resulting in confirming purchase orders.

Town officials did not have a comprehensive hardware inventory and can more effectively and efficiently manage software. Town officials did not adopt a comprehensive online banking policy or adequately segregate online banking duties. We also found Town officials did not regularly generate or review audit trails or exception and change reports and did not develop a data classification process. In addition, the Board did not adopt a comprehensive disaster recovery plan. As a result, the Town has an increased risk that its IT data and components may be lost or misused and that the Town will be unable to resume critical operations if a system failure occurs.

We reviewed all 269 claims paid during the audit period totaling $216,953 ($148,192 during 2016 and $68,761 from January 1 through June 30, 2017) to determine whether the claims were adequately supported, properly authorized and approved before payment and for valid purposes. Except for minor exceptions which we discussed with District officials, all of the claims were supported by sufficient documentation and for appropriate purposes. However, the Board did not approve 80 claims totaling $101,707. Additionally, the Board did not subsequently approve eight claims totaling $3,459 that were properly paid in advance of audit.

The District did not present a District-wide capital improvement project (Project) to the public in a transparent manner. The scope was not set forth in a detailed project plan and District officials could not provide documentation to support the total estimated cost approved by the voters. Finally, the Board did not receive adequate financial reports to properly oversee and monitor the Project. Because the Project's actual cost ended up being below the maximum amount authorized by the voters, District officials had an opportunity to spend approximately $8.8 million less when the bids came in with estimated costs significantly less than anticipated. However, District officials decided to complete additional work and expand the project scope without informing the voters.

The Board did not effectively manage fund balance. From 2014 through 2016, budgeted appropriations exceeded expenditures, resulting in the accumulation of excess fund balance in the general fund. Budgeted general fund appropriations exceeded expenditures by an annual average of 15 percent for the last three years. As a result, as of December 31, 2016, the fund balance in the general fund had increased 75 percent, to over $482,000, from approximately $275,000 in 2014. The Supervisor told us he recognized the fund balance was high but did not realize how much it had increased. He told us the Board plans to use about $200,000 of fund balance for Town Hall repairs and renovations in 2018. However, this will not result in a significant reduction in fund balance levels. We project the Town will end the 2017 fiscal year with another operating surplus; this time totaling almost $100,000, which will further increase fund balance. Moreover, the Board has not developed a fund balance policy or comprehensive multiyear financial and capital plans specifying the Town's objectives and goals for using the accumulated funds.

The Board has not established written policies and procedures for cash receipts, cash disbursements and fundraising activities or adopted a code of ethics to guide officers and members regarding expected standards of conduct, as required by General Municipal Law. Additionally, the bylaws provide limited guidance on the Board's responsibilities and the Treasurer's duties. The Board did not ensure fundraising money was always reconciled and deposited intact. Company officials did not keep any supporting documentation for 16 disbursements totaling $2,415 that were valid expenses. Additionally, two cash payments totaling $4,500 were paid to a vendor from fundraising proceeds and a change fund before deposit. While these payments were legitimate expenses, the practice of paying vendors in cash circumvents good business practices by weakening accountability over both revenues and expenditures.

We found that the Board generally provides adequate oversight to ensure that financial activity is properly recorded and reported and District money is safeguarded. The Board adopted a procurement policy that addresses all procurement of the District's goods and services. We reviewed bank statements and deposits totaling $345,323 and found that the money was properly deposited and accounted for. We also reviewed 278 disbursements totaling $395,648 and found they were generally supported with adequate documentation, properly authorized and for valid District purposes. However, these purchases were not always made in compliance with the District's purchasing policy. As a result, the District did not solicit competition, or retain evidence of soliciting competition, for 97 purchases totaling $171,013 that were subject to its purchasing policy. The majority of these purchases were for a capital construction project and building maintenance on the District's fire hall ($57,831), liability insurance ($41,596), fleet maintenance ($30,919) and firefighter physicals ($14,178).

The District Clerk's (clerk) duties are not adequately segregated because she processes all non-payroll and payroll disbursements with limited oversight. For example, the clerk is able to add vendors, process invoices and record disbursements in the computer system. The clerk is also responsible for performing nearly all human resource and payroll functions, including adding and removing employee records in the payroll system, entering and adjusting pay rates and processing payrolls. Additionally, the clerk prepares and prints non-payroll and payroll checks, opens mail (including bank statements) and prepares bank reconciliations. We found that salaries and wages were accurately calculated and paid. Finally, the Treasurer did not control her signature or supervise the application of her signature during the check signing process. The clerk prepares and prints checks that contain the Treasurer's signature without any oversight, approval or direct supervision from the Treasurer as required by the policy.

School officials did not maintain accurate, complete and supported leave accrual and use records. We reviewed leave records for all 13 full-time administrative and maintenance employees, including three employees who left School employment during our audit period, and five instructional employees. We found discrepancies with nearly all these leave records. The sign-in and sign-out sheets did not agree with the leave request forms, leave time records or related leave reports. As a result, we question the accuracy, completeness and reliability of these records. We compared the sign-in sheets to a list of active employees and identified 235 days when employees appeared to be absent because they did not sign in. We compared these absences to the leave request forms provided by the Business Manager and found 22 instances when an employee did not sign in at the front desk but had properly submitted a leave request form. However, the Business Manager did not record these absences in the employee leave records. As a result, leave records for these employees and the recorded leave balances were inaccurate.

The Village has a Friday through Thursday, two-week pay period. Employees are paid on the Friday after the pay period ends. All departments are required to submit payroll information to the Deputy Treasurer on Tuesday (two days before the last day of the pay period) for it to be processed by Wednesday. Therefore, the Departments submit employee timesheets prior to actual hours being worked on Thursday. In addition, some Village departments are not following the established pay periods and are submitting payroll information based on different pay periods created on their own. Because the pay periods are different depending on Department, an employee could be paid for hours that were not worked. We also found that timesheets did not have employees' signatures or show actual hours worked. We reviewed payroll records for the Department of Public Works employees who performed out-of-title work duties for the three test months. Five of the 12 employees were overpaid a total of $902. Finally, the Village under-budgeted for overtime in the 2016-17 fiscal year by $284,608 or 43 percent.

The Town's accounting records did not include a part-town (PT) general fund. General fund PT revenues and expenditures were not properly allocated. Specifically, revenues and expenditures related to building inspections, code enforcement, registrar of vital statistics, recreation and the Town's contribution to the Dannemora Free Library were budgeted for in the TW general fund even though these transactions are required, by various statutes, to be accounted for in the PT general fund. The 2016 and 2017 TW general fund budgets contained PT revenues totaling $4,500 and $5,500 and PT appropriations totaling $79,120 and $79,159, respectively. During the audit period, $148,278 was allocated to the town-wide (TW) general fund instead of the PT general fund. As a result, the Town unnecessarily taxed Town residents residing within the Village which subsequently lowered tax rates for Town residents living outside of the Village.

Authority officials had not established adequate procedures over solid waste and recycling charges to ensure customers were accurately charged and the corresponding amounts collected were deposited in a timely manner and intact. Although the Board adopted a cash handling procedures policy (policy) to provide guidance for employees involved in the billing and collection of solid waste and recycling charges, the policy was inadequate because it was not comprehensive and the procedures included were not always adhered to. In addition, 50 solid waste and recycling rates that were charged to customers during our audit period were negotiated by the Director without an independent review and Board approval. Consequently, customers were charged varying rates for disposal of the same type of waste. We also found that one of the Board-adopted rates was not accurately setup in the system. As a result, the Authority lost revenues of $17,413. Further, Authority officials did not disburse host community fees to the Towns of Constable and Westville in accordance with the host community agreement. Based on the agreement, officials underpaid $19,585 in host community fees to both these towns for waste received during the 2014-15 and 2015-16 fiscal years, a combined underpayment total of $39,170. In addition, because the agreement has been in place since March 2009, if similar miscalculations were performed in previous fiscal years these Towns are likely entitled to additional host community fees.

We found that payroll access rights were not adequately restricted to employees based on job duties. In addition, duties related to the payroll certification process were not properly segregated. Finally, except for minor discrepancies, which we discussed with BOCES officials, the employee salaries and wages we reviewed were accurately paid.

The Board does not have a comprehensive multiyear financial and capital plan or reserve policy to address the Town's operational and capital needs, including the replacement of vehicles and equipment, infrastructure or the aging highway garage. We examined all 35 Town-owned highway assets to determine their age and remaining useful life. Based on the asset's average age, many of the highway's capital assets have exceed their useful life. The Board also has not adopted an adequate fund balance policy, which resulted in the Town accumulating excessive fund balance in the general fund.

The purpose of our audit was to determine whether municipal parking structures were regularly inspected and repaired for the period January 1, 2015 through January 31, 2017. We extended the scope of our audit back to July 2007 to review inspection reports and repair documentation.

The District's unrestricted fund balance has exceeded the statutory limit for the past three fiscal years by amounts ranging from $1.5 million to nearly $3 million, or by 5.7 to 10.3 percentage points. Although the Board appropriated fund balance each year to help finance the budget, none of it was needed because the Board and District officials overestimated appropriations each year. District officials have also allowed the unemployment reserve balance to accumulate to an excessive level and have not used funds from the retirement contribution reserve as budgeted. As a result, the Board and District officials have missed opportunities to reduce taxes and return excess funds back to the residents.

Although our testing found receipts were deposited in full, they were not always timely. There were 149 clerk fee receipts totaling $4,200 and 53 real property tax receipts totaling $128,000 that were deposited up to 22 days late. The Clerk properly recorded, reported and disbursed all money collected. For example, we found the collected 2016 and 2017 real property taxes totaling $1.7 million and sewer rents totaling $12,900 were disbursed to the proper parties.

The Director has not established written procedures and, therefore, collection procedures differed at each collection point. As a result, cash was not always properly collected or deposited in a timely manner. For example, Library staff did not issue adequate receipts for all collections. Because the Director did not establish adequate procedures to accurately account for the inventory, sale and reconciliation of attraction tickets, Library staff did not properly account for attraction tickets purchased and sold. Finally, the account clerk performed incompatible financial duties.

City officials accurately paid employees' salaries and wages. However, officials need to improve controls over payroll preparation and processing. There is no independent certification of payroll prior to the distribution of payroll checks. The City has delegated certain of the Comptroller's disbursement duties and custody of City funds to an outside payroll processing company without legal authority. City officials also need to improve controls over Community Activity Center cash receipts. City officials have not formalized policies and procedures over the Community Activity Center's cash collections. City officials could strengthen controls by ensuring individual accountability is maintained when cash is collected and changes possession.

The Superintendent designated an inventory secretary (secretary) who compiles the inventory using information provided by the accounting department and computer network specialists. Upon receiving this information, the secretary reviews the data provided to identify all assets that are over the District's $500 threshold, then records those assets into the District's inventory record. However, because neither accounting personnel, nor the computer network specialists provide this information timely, the secretary cannot maintain a complete and accurate inventory record. In addition, the Assistant Superintendent for Finance and Management is not ensuring that a physical inventory is conducted more frequently than every five years and that any differences from the District's inventory records are investigated. For instance, the District purchased $2.9 million of IT assets in 2016-17, $2.6 million of that through the Smart Schools Bond Act. However, accounting department staff did not provide the 2016-17 inventory additions until September 9, 2017, which resulted in most of the 2016-17 assets not being added to the District's inventory records. We selected seven IT asset claims that contained 276 items totaling $109,031 to determine whether assets were recorded in the District's inventory records and physically located in the recorded location. Except for a smart document camera valued at $799, none of the assets purchased on the selected claims were recorded in the District's inventory records.

The District did not apply for all transportation State aid for new bus acquisitions. We reviewed all nine of the District's new bus acquisitions during our audit period and found the District had submitted the proper forms to the State Education Department (SED) for two of the nine buses. The seven buses that were not reported to SED were acquired for a total combined cost of $647,196. As a result, the District was in danger of potentially losing $194,852 in State aid. In addition, club collections were not supported by adequate documentation and were not always deposited in the amounts received. The central treasurer made 31 disbursements totaling $39,134 without supporting documentation. These disbursements were for appropriate purposes. Student ledgers were not always accurate. Finally, sales tax was not collected or remitted.

District officials did not always obtain the necessary number of quotes as required by the procurement policy. In addition, when quotes were not obtained, officials did not document the reason for the action taken. We reviewed 39 purchases totaling $162,010. While District officials complied with the policy for 12 purchases totaling $84,966, officials did not seek multiple quotes for 27 purchases totaling $77,044. For example, District officials spent a total of $18,746 on vehicle repairs and maintenance from four different vendors during the audit period without obtaining the required quotes. We also found that the required number of quotes were not obtained for other purchases, including heating, ventilation and air conditioning maintenance ($9,610), uniform purchases ($6,466), air or oxygen tank refills ($5,333) and an upgraded surveillance system ($4,415). The District could pay more than necessary if District officials do not obtain quotes as required by the policy.