On December 7, 2023, New York State Comptroller Thomas P. DiNapoli announced the following local government and school audits were issued.
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The board did not provide adequate oversight of financial operations. As a result, the board cannot be sure it has accurate financial information to make decisions and gauge the village’s financial condition. The board did not establish controls or other oversight procedures to compensate for the clerk-treasurer performing all functions of the financial and recordkeeping duties or audit the clerk-treasurer’s records and reports for the fiscal year ending May 31, 2022.
The board did not always ensure non-instructional employee overtime was properly monitored, approved or calculated. The 15 highest overtime earners received overtime totaling $254,820 during the audit period. A review determined BOCES officials may have been able to reduce overtime by up to $28,337, or almost 11%. BOCES officials paid a total of $66,295 to 13 employees for work on Saturdays that included $22,091 additional pay for working overtime. However, the BOCES Classified Employees’ Association collective bargaining agreement supports a Tuesday through Saturday work week. Therefore, this overtime may have been avoided if some employees worked Tuesday through Saturday instead.
The city’s use of approximately $3.4 million of general fund balance to close gaps in the budget decreases the fund balance that is available to cover unforeseen circumstances. The city has also appropriated approximately $2.5 million of sewer fund balance and appropriated $24,770 of fund balance for the water fund. However, the water fund already has a deficit fund balance of $58,722. In addition, the city should refrain from including the $1.5 million revenue and corresponding expenditures in their 2024 adopted budget for the New York State Touring Route Program because there is no assurance the state will appropriate additional money for this program. Also, the city could potentially face shortfalls based on revenue estimates for sewer usage and sale of metered water and the budgeted overtime funding for police of $1.1 million is likely underestimated by a total of at least $715,000. During the review of the city’s proposed 2024 budget, two conflicting proposed budget documents were posted to the city’s website.
Town officials paid severance payments to the former police chief, totaling $229,251, pursuant to a separation agreement with the town. While the separation agreement included $13,383 for earned, but unused leave accruals, neither the board or other town officials were able to provide any additional written documentation to support the town’s decision to pay the additional $215,868 in severance payments.
Separation payments were not properly authorized, adequately supported or accurately calculated. This resulted in unsupported and possibly improper payments being made. Of the 23 separation payments made between April 1, 2020 and Oct. 31, 2022, to 18 employees, totaling approximately $306,000, seven payments totaling approximately $13,400 did not have adequate support and six additional payments totaling approximately $6,800 included leave balances that were not authorized to be paid at separation. This included $3,400 paid to one employee that did not leave city employment. In addition, one payment totaling approximately $45,000 was based on more than nine years’ worth of leave accrual records.
The former comptroller used improper accounting practices and did not complete timely and accurate annual and monthly financial reports. As a result, the council did not have accurate and up-to-date financial information when making significant financial decisions. Fiscal year-ending 2021 general fund cash was overstated by approximately $330,000 and annual financial reports for 2018 through 2021 were not filed until after the resignation of the former comptroller. The longest overdue report was more than four years past its due date and monthly financial reports included erroneous reporting of revenue and expenditures. In addition, the mayor and council did not ensure annual reports were accurate and submitted in a timely manner. Monthly financial reports were inaccurate because the former comptroller was using improper accounting practices that the council did not detect.
Officials did not always use a competitive process when purchasing goods or services and some officials were unfamiliar with the town’s procurement policy requirements. Of the 28 purchases reviewed totaling $1.2 million, officials did not properly seek competition for three purchases totaling $170,575.
BOCES officials did not properly monitor and account for Information Technology (IT) assets. As a result, officials cannot ensure that assets are in BOCES’ possession and protected against loss or unauthorized use. Officials did not maintain accurate and up-to-date inventory records, affix identification tags to all assets, periodically conduct physical inventories, and ensure sensitive data was erased before assets with hard drives were disposed of. Sixty-nine out of 140 recorded IT assets could not be located. Also, 30 out of 95 assets on hand were not listed in the inventory records. In addition, none of the 39 IT assets purchased and placed in service during the 2022-23 school year were added to the inventory records and none of the 25 computer disposals tested had evidence that the hard drives were sanitized prior to disposal. Furthermore, 11 other computers were sanitized and disposed of but were still active in the inventory records. The inventory records also did not always show the proper location of IT assets and sometimes were missing key information such as serial numbers, locations, purchase dates and costs.
The board and district officials did not always use a competitive process to procure goods and services. As a result, they did not comply with district policies or state law and may have paid more than necessary for goods and services. The board and district officials procured 167 interactive panels for $684,132 without obtaining competitive bids and did not obtain quotes or request proposals in accordance with district policies for 23 purchases totaling $102,378.
Village officials developed a comprehensive investment program but did not effectively manage the program. During the 22-month audit period, the village earned approximately $5,800 from money on deposit in the village’s checking and savings accounts, which had an average daily balance of approximately $3.7 million. Had officials considered other legally permissible investment options, the village may have earned approximately $96,900. Officials also did not prepare monthly cash flow forecasts to estimate funds available for investment or monitor investments and did not formally solicit interest rate quotes or consider other legally permissible investment options.
District officials did not properly approve and monitor overtime worked by employees. As a result, employees may have worked unnecessary overtime. Officials paid 10 employees $198,716 in overtime for emergency, non-emergency and absenteeism during the 21-month audit period. Approximately $186,330 of overtime work to be performed was not properly approved. Officials paid 10 employees a total of $36,734 in overtime to conduct 270 building checks. However, officials lacked the required building check forms to support that 267 checks were performed, and officials did not follow up with the employees to confirm the checks were conducted. While the overtime costs for the audit period examined accounted for 24% of department employees’ total compensation, officials did not perform a cost benefit analysis or determine other options that may have reduced overtime.
School officials did not always accurately compensate employees or require adequate support for hours worked as payroll errors went undetected and resulted in unnecessary and erroneous payments. Auditors reviewed policies and documents and examined payroll-related records for 25 of the 138 individuals employed by the school and determined that officials lacked records to support compensation totaling $18,527 paid to three hourly employees and twelve employees received pay that was not consistent with their employment agreements, authorized pay rates or board policy resulting in compensation errors totaling $5,188. Officials also could not support they provided sufficient information for the board to perform its oversight duties or ensure that the chief executive officer authorized salaries within the board-approved range. In addition, officials did not adequately segregate payroll duties or establish sufficient compensating controls, which could allow other discrepancies to occur.