District officials should improve controls over Backpack Program (Program) receipts and disbursements and oversight of non-District group transportation services. District officials deposited Program money, as collected and turned over by the volunteer, into District accounts but did not ensure that the volunteer provided adequate documentation to support the amount of cash collected. As a result, approximately $1,300 in fundraising collections were unaccounted for and the Program's fund did not reimburse the school lunch fund for a minimum of $4,640 spent on Program expenditures. In addition, although the Board adopted a transportation and use of building policy, its intentions for fees to be charged for using District property were not clearly outlined. For example, one non-District group that frequently used the Districts' buses was not charged the standard fee of $2.85 per mile fee charged to other groups. We found that six of the 23 non-District groups who used District bus services did not fill out a Use of District Property form, as required by the policy, and obtain the Superintendent's approval to use the buses. Furthermore, District officials have not updated the District's actual cost per mile since 2009. They prepared a cost per mile analysis for reimbursement rates after we began our audit. We reviewed their analysis and determined that the District cost per mile was $4.59. However, District officials charged most users $2.85 per mile, a difference of $1.74 per mile. As a result, District officials charged non-District groups $59,000 during our audit period, when it actually cost the District $105,000 to provide these transportation services.

The Board did not adopt policies and procedures for granting, revoking, modifying and monitoring individual access rights to the networks. In addition, the Board has not adopted a comprehensive disaster recovery plan or policies and procedures for password security management. We compared a list of all individuals who have access to the networks to the payrolls and volunteer rosters to determine whether users are currently employed or affiliated with the Village and should have access. We found that eight individuals who were no longer affiliated with the Department still had active user accounts and could access the Department network. Finally, although the Board has adopted an acceptable use policy for the use of Village-owned computers, email and the Internet, the Board did not provide users with security awareness training to help ensure they understand security measures to protect the Village networks.

The Board has taken actions to improve the Village's financial condition, but Village officials should remain vigilant to continue these improvements. In February 2015, The Board adopted a fund balance policy that established the minimum desired fund balance levels the Board wants to maintain in each operating fund and budgetary procedures to help the Village achieve and maintain those levels. The policy sets a minimum fund balance target of $500,000 for the general fund, $250,000 for the water and sewer funds, $100,000 for the hydroelectric fund and $50,000 for the refuse fund. Each month, the Board receives detailed budget versus actual reports for all funds. In addition, the Board approves budget modifications at regular Board meetings as necessary. However, even though the Board is actively engaged in monitoring the budget, the Village's hydro-electric and sewer funds had deficit fund balances as of May 31, 2016. In addition, the general fund's unrestricted fund balance was relatively low, leaving the Village vulnerable to cash flow concerns and fiscal stress. Although Village officials have taken steps to improve the Village's financial condition, the Board has not developed and adopted comprehensive, written multiyear financial or capital plans. It also does not have any other mechanism in place to adequately address the Village's long-term operational needs.

The Board has not ensured the maximum occupancy of tenant housing units to qualified applicants. As a result, the Authority maintained a consistently high vacancy rate (33 percent vacancy rate for senior housing and 9 percent for non-senior housing as of March 31, 2016). As a result, the Authority annually lost potential revenue that ranged from approximately $72,000 to $117,000. Despite the lower occupancy rate, Authority officials did not demonstrate urgency to ready all vacant apartments to rent. For example, the March 2016 vacancy report indicated that the average vacancy period was two years, with three units remaining vacant for over eight years. We further identified both tenants and tenant applicants that were not treated in a consistently fair and equitable manner, resulting in questionable application rejections, waitlist cancellations and, conversely, potential preferential treatment to others. The result of the numerous inconsistent application rejections and cancellations further compounded the Authority's high vacancy rates. The high vacancy rates occurred because of the Authority's poor control environment. We found deficiencies in the information technology (IT) controls over the Authority's computers, including poor malware protection and insufficient IT governance. The Authority recently experienced at least two malware infections, and we found inappropriate and questionable Internet use on Authority computers, including access of pornographic websites. As a result, the Authority's personal, private and sensitive information (PPSI) is at risk of unauthorized access, public disclosure, inappropriate modification or interruption of legitimate use. Moreover, time spent visiting pornographic, social networking and shopping sites could have been used to fill vacant apartments and reduce the vacancy rates.

The Yonkers Public School District's budget request is $589.4 million for appropriations; however, the City's Executive budget contains revenues for the District of $572.9 million, resulting in a shortage of approximately $16.5 million. The District's budget request does not include an appropriation for textbooks and underestimated the appropriations for Social Security tax and charter school tuition payments. The City continues to rely on nonrecurring revenue, such as fund balance, to balance its budget. The City transferred $600,000 to its Community Development Fund, leaving a budget shortfall in the general fund. Revenue estimates for mortgage tax, income tax surcharge, parking violations, metered water sales, and other fees may not be achievable. The City's appropriations for tax certiorari settlements may not be adequate, the appropriation for police overtime could be underestimated, and Social Security tax is underestimated. The City's proposed budget does not include a contingency appropriation. The lack of a contingency fund, along with the near depletion in the City's unassigned fund balance, leaves the City vulnerable to unexpected events.

The Board did not adequately manage the finances for the sewer or water capital projects or develop a long-term plan that evaluated each project's financial impact on the annual operating budget. The sewer fund did not have sufficient cash to pay $296,000 of new debt service costs. As a result, the sewer fund had to borrow approximately $293,000 from the general fund and the loan has not been repaid because the sewer fund's financial condition has deteriorated. In addition, the Board did not approve water capital project change orders, which resulted in the project's budget being overspent by $179,000 (5 percent). As a result, there will be limited cash for water operations and unrestricted fund balance in the water fund will be significantly reduced. Unless these problems are addressed, future operations could be adversely impacted.

The Board adopted an employee handbook in 2005 that outlined policies and procedures regarding time attendance and leave accrual benefits including compensatory time. However, the Board did not ensure that Village officials and employees consistently followed the established procedures. For example, we found the time sheets for the former Deputy Clerk and current Clerk were not consistently approved and signed. Furthermore, the current Treasurer's time sheets were never approved and signed. Currently, one employee is eligible for compensatory time. We found that the Board does not require this employee to maintain a log of compensatory time earned or used and the employee is not maintaining a log. In addition, one employee, who has worked 28 years for the Village, is eligible for vacation leave. This employee told us he has never used vacation leave when he takes time off, does not know how much vacation leave he earns each year, does not know how much leave he has accrued nor how much he will be entitled to as a payout upon retirement. This employee does not use a time attendance system or maintain leave records for time taken or accrued.

Based on the results of our review, except for certain matters, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. Our review identified issues that require the City Council's attention. The proposed budget includes estimated revenue for refuse and garbage charges of $9.45 million. These amounts include a mid-year increase of refuse and garbage charges to $15 per sanitation parcel, which the City Council has not yet authorized. If the proposed increase is not authorized, or is authorized at a different rate, budgeted revenues for refuse and garbage charges should be modified accordingly. The City's proposed budget includes appropriations for overtime salaries totaling $2.7 million. The City expended $2.7 million in the first nine months of the current fiscal year. In addition, overtime costs have averaged approximately $3 million in each of the last five completed fiscal years. Although the City has improved its projections for overtime costs in certain departments, based on the trends it does not appear that the total proposed appropriation will be sufficient. Because officials decided to adopt the budget on May 16, 2017, rather than the initial May 23, 2017 adoption date, and did not communicate this change to our Office, we were not able to provide recommendations to the governing board in a timely manner.

The Board and Village officials need to improve controls over water department operations. Because the Village does not use water meters, Village officials cannot determine how more than 90 percent of the water produced is consumed. While the Village produced approximately 98 million gallons of water during the 2015-16 billing cycle, it recorded commercial usage of about only 7 million gallons. Therefore, Village officials have no information concerning whether the remaining 91 million gallons was consumed by residential customers, used for municipal purposes or lost to leakage or unapproved use. In addition, Village officials have not established proper procedures to ensure adequate collections of water rents receivable. As a result, the Village maintains a balance of $27,370 of water rents over 90 days past due, which represents approximately 8 percent of total 2015-16 water billings. Furthermore, approximately 10 percent of all 2015-16 water billings had a late fee that was charged improperly, resulting in a loss of $1,110. By identifying the sources of unaccounted for water and improving water billing and collection procedures, the Village could realize significant cost savings and revenue enhancements in water department operations.

The local Board members did not provide adequate oversight of the management company (Company) or actively direct and monitor the School's financial operations. The Company performed all aspects of the School's financial transactions, which School officials could not monitor because they did not have access to the accounting records and bank accounts. Further, the local Board members did not regularly receive monthly financial reports from the Company, and reports submitted since August 2015 were insufficient and lacked information, such as a detailed budget-to-actual report and cash flow statement. As a result, the School's budgets were insufficient to adequately support ongoing operations, financial records and reports were inaccurate and incomplete, and the local Board member's ability to carry out their oversight responsibilities was severely limited. Consequently, the Board was not fully aware of the School's financial problems and was not in a position to take timely, effective corrective steps. We also found that one School Trustee may have a prohibited interest in a School contract. Because the Board has conceded management of the School to the Company with limited oversight, School officials and taxpayers cannot be assured that the School's financial transactions are appropriate and in the best interests of the School rather than the Company.

During our audit period, the District purchased two non-firefighting vehicles at a net cost of $54,089. In June 2015, the District purchased a 2015 SUV for $39,494. In August 2015, the Board traded in a 2011 vehicle for $10,000 and applied the proceeds towards the purchase of a 2015 SUV that cost $24,595. These two vehicles, which were both black, were not clearly marked on their exterior as District vehicles. District officials told us that the vehicles are not marked because they are not used for firefighting purposes. During our audit period, these two vehicles were driven a combined total of 15,151 miles and were used primarily by the Commissioners. The Board did not appropriately document and monitor use of these vehicles or ensure that they were used primarily for actual and necessary District purposes in an efficient and economical manner as required by the policy. Although the vehicles were purchased in mid-2015, no use was recorded for either vehicle in the vehicle use log until May 2016. The unrecorded mileage for both vehicles during this period totaled 11,513. As a result, District officials have no record of who used these vehicles or for what purpose from the time of purchase until May 2016. If the District had reimbursed the Commissioners or personnel for the 1,989 miles that were for documented District purposes, the cost would have been about $1,110 or about $3,330 annually. It may be more cost effective to reimburse officials actual and necessary business travel rather than purchasing and maintaining two vehicles that are not intended to be used for firefighting purposes.

District officials need to ensure that District staff comply with the Board's purchasing policy. Staff did not always seek competition or obtain the required number of quotes when purchasing goods and services. In addition, District officials did not have written agreements with four professionals for services totaling $27,048. As a result, there is an increased risk that goods and services may not be procured in the most economical manner and that the District could be paying more for professional services than intended. The Board also did not ensure that all claims were supported with documentation and that claims were for appropriate District expenditures. Twenty-six claims totaling $311,774 had deficiencies including a lack of receiving slips, invoices, vouchers and original receipts. In addition, the District has a debit card that was used for 25 transactions totaling $7,017. Many of these transactions did not have sufficient documentation and the use of the debit card allows payments to be directly withdrawn from the District's bank account before approval.

The Land Bank executes a Development Enforcement Note and Mortgage Agreement (Agreement) that sets the Land Bank's lien terms, or enforcement mortgage. As part of this Agreement, the buyer agrees to improve, develop and/or repair the property in accordance with a redevelopment plan, which addresses the scope of the renovations needed. Once the required renovations or improvements are complete, Land Bank officials discharge the mortgage and the property is considered to be back in productive use. We found that procedures to monitor buyers' compliance with the redevelopment plans exist, but monitoring was not always timely. Enforcement mortgage property records did not always contain work-in-progress status and an activity history was not retained for each.

Village officials calculated water and sewer bills using estimated meter readings when actual meter readings were unavailable or unreasonable. While it is not uncommon for a Village to bill customers based on estimated readings, Village officials should review excessive usage, take steps to correct leaks and broken meters and contact residents to ensure they are accessible for meter readings. Village officials do not reconcile gallons of water produced to gallons billed. During our audit period, the Village produced 35.8 million gallons of water and billed 16.4 million gallons, resulting in an excess of 19.4 million gallons (54 percent) produced but not billed. Village officials believe the excess gallons produced over gallons billed is primarily the result of the tower's frequent and severe leaks. However, until the tower is repaired and water produced is reconciled with water billed, the Village lacks assurance that the tower's leaks are the predominant leaks in the infrastructure. The cost of producing the excess gallons of water during our audit period was approximately $9,600. The Board has not adopted a long-term capital plan to address this issue.

From fiscal years 2013-14 through 2015-16, budgeted appropriations in the general fund exceeded actual expenditures by an annual average of $99,600 (36.8 percent). Budgeted general fund appropriations exceeded actual expenditures by an annual average of $99,600, or almost $300,000 over the last three years combined. Operating surpluses totaled over $230,000 for fiscal years 2013-14 through 2015-16.The average budget to actual variance for total expenditures from 2013-14 through 2015-16 was 37.3 percent. Unrestricted fund balance increased $148,357 (60 percent) over the past three years to $396,383 as of May 31, 2016, which represents 105 percent of the ensuing year's budgeted appropriations. Village officials have not developed a comprehensive, written multiyear financial or capital plan.

Our review of $113,000 in total travel expenditures incurred during 2015 and 2016 identified significant potential savings that the District could have achieved in reimbursing officials for meals, lodging and vehicle rentals. Although the Board has not adopted a written travel policy, it adopted a resolution establishing a per diem rate of $100 to cover meals and incidental travel expenditures. However, this rate exceeded the GSA per diem rates for meals and incidentals. Of $31,100 that the District paid to 14 officials for meals and incidentals during 2015 and 2016, it could have saved up to $17,600, or 57 percent, by using the established GSA rates. In addition, the Board has not established clear limits or parameters for determining reasonable lodging costs or cost-effective methods of travel. Of $39,700 in lodging transactions for 10 overnight trips, the District potentially could have saved up to $12,800 (32 percent) if discounted conference hotel rates were used when available. The District also paid $2,600 in vehicle rental costs for officials attending three out-of-state conferences in 2015 and 2016 but could have saved up to $1,600 (62 percent) had District officials shared rental cars.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. However, Village officials have not filed the annual update document (AUD) for the 2015-16 fiscal year, making them at least 180 days late. Village officials should file their 2015-16 AUD with OSC as soon as possible. Finally, the Village's proposed budget does not comply with the property tax levy limit.

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget for the general, electric and parking funds are reasonable. The water and sewer funds' tentative budgets are not balanced and include a deficit of approximately $236,000 and $206,000, respectively. Village officials plan to raise water and sewer rates. The Village has adopted a local law to override the tax levy limit.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. However, based on the 2017-18 proposed budget, the Village will have exhausted 91.2 percent of its taxing authority. The Village's ability to rely on real property taxes as an increased revenue source in the future is limited. If the Village exceeds its tax limit, the State Comptroller is required to withhold State aid in an amount equal to the tax limit exceeded. We caution the Village that if property values do not increase, the ability to increase taxes may be reduced in the future. The Village's proposed budget includes a tax levy which does not increase the tax levy over the 2016-17 fiscal year.

The Clerk-Treasurer performed all the financial duties with limited Board oversight. The Board did not require an annual audit of the Clerk-Treasurer's records and reports. The Village paid claims totaling $91,247 that did not have proper detail and support.

District officials accurately paid employees' salaries and wages. We reviewed all gross pay calculations totaling approximately $2.5 million for 30 employees during our audit period to determine whether the information entered into the system agreed with the time records, pay rates agreed with Board resolutions, individual employee contracts or collective bargaining agreements and gross pay was accurately calculated. Except for some minor discrepancies, which we discussed with District officials, the employee salaries and wages reviewed were accurately paid. We commend District officials for establishing a well-designed system for processing payroll to ensure employees are accurately paid the salaries and wages to which they are entitled.

Salaries and wages, including overtime, totaled approximately $303.6 million (38 percent) of the District's expenditures of $800.4 million for the 2015-16 fiscal year. The significance of the District's payroll costs highlights the importance of having effective procedures to accurately calculate salaries and wages. District employees' payroll-related payments that we tested were often incorrect or unsupported. The District did not have written policies or procedures for the processing or monitoring of payroll payments. The process that was in place was disjointed, decentralized and not well documented. Due to the large quantity and variety of contracted miscellaneous payments and salary adjustments across four collective bargaining agreements, numerous staff are necessarily involved in processing different types of payments. However, this makes it virtually impossible for payroll staff to identify all of the payments due, changes required and data entry or calculation errors made in the time available to process the payroll. Although the errors we found did not involve significant amounts of money, they were pervasive within the payroll system and were not detected timely by District staff in their regular course of business. The Board and District officials did not implement adequate monitoring procedures to ensure staff consistently complied with General Municipal Law or District purchasing policies and procedures when making purchases on the District's behalf. Hundreds of staff routinely made purchases outside the normal requisition and purchase order process, through the use of District procurement cards, significantly increasing the risk of unauthorized or overpriced purchases.

Authority officials control gate entry to the treatment plant but do not adequately monitor trucked in waste and ensure that all waste discharged is properly billed and complies with discharge limitations. IWS personnel do not measure or verify the amount of liquid and/or slush waste trucked in for treatment and disposal; instead, they allow haulers to self-report on the volume in their loads. As a result, the Authority could be losing out on as much as $300,000 in annual revenues. In addition, the IWS Administrator has not periodically sampled and conducted all required analytical data tests to ensure waste discharge complies with discharge limitations. From July 2014 through November 2016, the Authority conducted 65 (32 percent) of the minimum 204 waste sample analysis tests. While the Authority paid $15,800 for these 65 tests, the permits provide that the Authority could instead require the haulers to conduct these tests. This would reduce Authority costs. We estimate these costs would be over $35,000 if the Authority conducted, at a minimum, the required three sample tests during the year for each hauler. Further, because sampling activity is not in accordance with Authority requirements there is an increased risk that haulers will not be charged enough to treat their waste and that their discharge could have an adverse effect on Authority personnel and equipment.

Land Bank officials monitor the number of homes rehabilitated and sold by the Subcontractor and all 10 projects we reviewed were awarded to the lowest bidders. However, Land Bank officials do not adequately monitor other aspects of performance, such as the selection of construction managers, awarding of contracts for projects or subcontractor performance. As a result, there is an increased risk that managers will not be assigned for sound reasons and without favoritism and that projects will not be completed in a timely manner or for the best value. Land Bank officials also do not adequately monitor cash disbursements or profits from the sale of rehabilitated homes to ensure they do not exceed the grant maximum of 15 percent of the project's cost. Although the profits for all 10 properties we reviewed were appropriate, there is an increased risk that profits will exceed the grant maximum. There is also an increased risk that the Land Bank could pay for costs already subsidized by other funding sources or for goods and services that are inappropriate or not received.

The Board adopted written cash receipts and disbursements policies in January 2017, but no written policies or procedures were in place during our audit period. The Board adopted an annual resolution granting the Treasurer the authority to pay specific recurring claims. However, the Board did not perform an audit or review District claims. The Board's insufficient oversight of the disbursements process creates a risk that payments may not be for appropriate purposes.