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The board did not provide adequate oversight of the disbursement process and exceeded its authority under New York State Town Law by authorizing insurance claims and annual contracts to be paid before audit and approval. The board also exceeded its authority by allowing a third-party vendor direct access to the town’s bank account that, at times, had more than $500,000 on deposit. In addition, the board allowed debit cards to be used, which resulted in a circumvention of the town’s disbursement controls. Auditors found that the142 disbursements totaling $142,200 they reviewed were for proper purposes and adequately supported. However, the board, did not audit and approve 53 of these claims totaling $15,600 before payment as required.
The board did not provide adequate oversight of the treasurer’s financial operations. The board also did not know the treasurer did not comply with water and sewer village laws and codes which resulted in $29,300 in penalties not being assessed. The board did not Implement sufficient compensating controls to minimize the risks associated with the lack of segregation of duties within the treasurer’s office. In addition, the board did not approve or authorize anyone to approve billing adjustments for water and sewer bills nor did they require adjustments to be documented and retained. Auditors also found the board did not perform required annual audits. The last required audit was conducted in 2016.
Otsego-Northern Catskill (ONC) BOCES officials did not properly monitor and account for 66% of the 76 fixed assets auditors examined, including security cameras, computers, tools and equipment. Auditors found 30 assets totaling more than $104,000 did not have required asset tags. Eight assets totaling more than $12,000 were not added to the inventory list. Three assets totaling more than $6,000 were not located. Seven assets totaling $18,600 were found at different locations than shown on the inventory list.
The court properly accounted for, deposited, disbursed and reported fines and fees examined. There were no recommendations in this audit.
Corporation officials did not provide adequate approval and oversight of the revolving loan program. Auditors reviewed six of the 11 loans that were approved and paid but found they lacked required documentation of a commercial loan denial letter. The director did not adequately follow up with seven of the 14 businesses to verify that funds were used for the approved purpose. Loan agreements do not have job creation or retention enforcement mechanisms. Business job creation and retention numbers were not verified.
SCHOOL DISTRICT AUDITS
District officials did not apply for all transportation aid in a timely manner and were at risk of losing $20,513 for new bus acquisitions. The district also did not properly file for transportation aid for seven buses. However, after auditors identified the risk of lost aid, the treasurer prepared and submitted state aid applications for five of these buses and indicated she will file for the remaining two. Officials did not establish adequate procedures to ensure the district applied for all state aid for new bus acquisitions. In addition, officials did not perform an annual reconciliation of the district’s state aid receipts, records and reports.
District officials did not establish adequate controls over network user accounts and settings. Auditors found officials did not regularly review network user accounts and permissions to determine whether they were appropriate or needed to be disabled. In addition, 79% (71 network user accounts and 14 generic or shared user accounts) of the reviewed accounts were unneeded or questionable accounts. Officials developed a data security plan in January 2010 that included password security and user account management policies and procedures, however, the board did not adopt the policy and the practice was not implemented. Sensitive information technology control weaknesses were communicated confidentially to officials.
District officials generally paid employees’ salaries and wages accurately but did not establish adequate controls over payroll. Payroll was not always properly reviewed and certified before payments were made. There was no support, such as timesheets, for $1,497 of the $40,688 (4%) paid to hourly/daily employees during the months reviewed. The district has not performed a payroll audit or payout test (e.g., requiring employees to pick up their payroll statements in person).
District officials did not adequately authorize, monitor or control overtime. As a result, the district may have incurred unnecessary costs. District officials did not adopt written policies to ensure all overtime hours were preapproved, incurred only when necessary and adequately recorded. District officials also did not preapprove non-emergency overtime as required by district procedures. In addition, district officials did not adequately monitor the overtime budget to ensure that sufficient appropriations were available for overtime costs nor did they properly record all overtime costs.