Based on the results of our review, we found that the significant revenue and expenditure projections in the preliminary budget are reasonable. The District's proposed budget complies with the property tax levy limit.

We identified significant revenue and expenditure projections in the adopted budget that are not reasonable and could result in an increase in the County's accumulated deficit. Specifically, the 2013 budget lacks provisions for decreasing the general fund deficits. In addition, the County could potentially face a shortfall in revenue if the County does not receive the projected amount of sales tax revenue. If the Town of Orangetown does not reimburse the County for tax certiorari moneys during the 2013 fiscal year, the County will have an additional revenue shortfall of $2 million. If property is not sold, the County will experience a revenue shortfall of $2.4 million in 2013. It is unlikely that the $550,000 contingency appropriation will be sufficient to cover the annual average $2 million of uncollected taxes. The 2013 budget appropriation of $158 million for personal services appears to be insufficient. The County budgeted salaries as if no employees were taking the early retirement incentive that will be offered in 2013 and then accounted for a savings of $4.3 million in a separate budget account as a negative expenditure amount.

The Board did not meet the fundamental expectations of their financial oversight responsibilities. The Supervisor paid claims without Board audit. Moreover, key financial duties were performed by the Supervisor's bookkeeper, and the Justice's clerk without sufficient oversight from the Supervisor and Justice, respectively. The Clerk also performed all aspects of collecting and recording taxes and fees paid to her office. All of these duties were performed during 2011 without the Board performing their required annual audit.

County officials developed budgets containing unrealistic estimates, and maintained substantial fund balances that were not substantiated by formal and transparent plans for their use. The Board's adopted budgets for the past five years (2007 to 2011) included overestimated expenditures by approximately $28 million and underestimated revenues by $8.8 million, and generated operating surpluses totaling $21 million. The County also maintained reserves totaling $10 million as of December 31, 2011, with no plans in place for the use of these balances.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. The District's proposed budget complies with the property tax levy limit.

The Town does not have complete, accurate, and up-to-date accounting records, nor have monthly bank reconciliations been performed during our entire audit period. The Supervisor has not filed the required AUD with OSC for the past three years. As a result, the Board could not properly monitor and manage Town operations.

We audited certain moneys collected by four of the seven departments within the City responsible for collecting and/or depositing City moneys; the Finance Office, Public Transportation Office, Water Department, and the City Clerk's Office. Except for minor discrepancies, which we discussed with City officials, we determined that cash receipts collected by the Finance and City Clerk's Offices were adequately accounted for. However, unless City officials improve their recordkeeping practices, the risk will remain increased that all moneys due to the City will not be received, recorded and deposited properly.

The Board and Town officials did not adequately monitor the Town's financial operations and take timely action to maintain the Town's financial stability. The fund balances in the Town's major operating funds fluctuated significantly over the last four years primarily because the Board over-appropriated fund balance in the budget and allowed the budget to be overspent. In addition, duties relating to the Town's financial operations are not adequately segregated. The Supervisor is responsible for preparing and disbursing checks, preparing monthly bank reconciliations, recording cash disbursement entries into the accounting records, and preparing monthly reports to the Board, without the Board providing for an independent review and verification of her work. The Board also has not instituted controls to compensate for this lack of segregation of duties, such as reviewing bank statements, cancelled checks, and reconciliations.

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget for the general, electric, library, and parking funds are reasonable. The water and sewer funds' tentative budgets are not balanced and include a deficit of more than $203,000 and $220,000, respectively, or approximately 7 percent in each fund. Village officials told us they recognized the deficits and planned to raise water and sewer rates to make up the difference. The Village's tentative budget complies with the property tax levy limit.

Based on the results of our review, except for certain matters, we found that the significant revenue and expenditure projections in the tentative budget are reasonable. However, the Village has very limited fund balance and has proposed a limited contingency account. The Village should consider increasing the contingency appropriation in its adopted 2013-14 budget. A contingency account of 5 percent of appropriations ($94,000) would give the Village some flexibility in dealing with unexpected events. Any amounts not needed during the year would help to rebuild the general fund balance. The Village's tentative budget complies with the property tax levy limit.

The Executive Director did not ensure that disbursements were for proper DIBID purposes. He did not ensure that claims for payments had sufficient supporting documentation that would provide proof that they were for valid DIBID expenditures. We found that six of the 20 checks we tested, totaling $3,316, did not have sufficient documentation. Although DIA officials provided explanations for these expenditures, which appeared to be reasonable DIBID expenditures, without proper supporting documentation such as receipts, invoices, or bills attached to the claims, taxpayers do not have any assurance that these monies were used for valid DIBID purposes.

The Town does not reconcile the amount of money collected with the amount of trash disposed at the transfer station. We found that over a three-month period in 2012, the weight of the solid waste the Town paid to dispose of at the Franklin County landfill exceeded the amount of trash accounted for as being received at the Town's transfer station, resulting in approximately $10,000 in missing revenues. We also found weak internal controls over cash receipts and poor monitoring of solid waste received at the transfer station. One individual is responsible for weighing the solid waste to determine the amount owed from the customers, collecting fees, issuing receipts, and recording the collections. Additionally, duplicate receipts were not prepared for moneys received at the transfer station and no weigh slips were retained. The absence of the weigh slips and cash receipt records makes it impossible to determine if the proper amount of disposal fees were charged to customers and that all moneys collected were subsequently turned over to the bookkeeper in the Supervisor's office.

The Supervisor does not maintain timely or accurate accounting records for the Town. Therefore, the accounting records do not support the AUDs filed by the Supervisor for 2010 and 2011. Also, since the majority of the Town's funds are co-mingled into one checking account, bank reconciliations are prepared by the bookkeeper to balance with the Town's cumulative cash balance versus the cash attributable to each individual fund. Furthermore, the Board does not receive all the financial information it needs to monitor the Town's financial operations.

This is a follow-up on an audit released in 2010. Based on our limited procedures, it appears that the Village has made limited progress in implementing our recommendations. Of the eight audit recommendations in the original report, two recommendations were implemented, four recommendations were partially implemented and two recommendations were not implemented.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. The District's proposed budget currently includes a tax levy that is over the statutory limit by $58,246.

Towns can improve their monitoring of asphalt road surfacing projects to better ensure that asphalt products vendors provide meet bid specifications. Our review of a total of 26 asphalt projects in the 10 towns did not identify any material price or quantity exceptions.

The Board needs to improve its oversight of the Village's financial operations. The Board did not develop policies and procedures for the Clerk-Treasurer to follow when performing cash receipts and disbursement duties and did not audit, or cause to be audited, the Clerk-Treasurer's financial records and reports on an annual basis. The Board did not ensure bank reconciliations were properly performed and did not ensure the Village payroll was certified, as required by law. In addition, the Board did not provide mitigating controls to compensate for the lack of segregation of financial duties.

The Board adopted claims processing policies which require all claims to be audited prior to payment except for certain allowed exceptions. District policy requires the claims auditor to ensure that all claims are properly authorized, itemized, supported and that goods and services have been received in the amount and price as ordered prior to payment. We randomly selected 45 claims from all funds totaling $60,051 during our audit period and tested them to see if they were properly supported and audited in a timely manner. All of the 45 claims tested were audited timely and properly supported. However, the District reimbursed its dental insurance provider via automated clearing house (ACH) debits for payments made on behalf of District employees, totaling $554,458, during our audit period. District officials stated these claims were not audited prior to payment.

The Board did not adopt budgets for the sewer fund that provided sufficient revenues to finance expenditures, because revenues were consistently overestimated. As a result, the sewer fund balance has declined dramatically from approximately $20,000 as of May 31, 2008 to a fund deficit of approximately ($54,000) as of May 31, 2012. To compensate for the lack of sufficient revenues, the sewer fund borrowed $40,000 from other funds, which has not been repaid and improperly used $30,000 from a repair reserve. We also found that the Clerk-Treasurer did not maintain the Village's accounting records in a complete and accurate manner. Specifically, we found that cash, accounts receivable and accounts payable were misstated, which resulted in the operating funds' fiscal health appearing to be more favorable. In addition, the Treasurer does not provide, and the Board does not request, monthly reports that would provide essential financial information. Finally, the Board did not ensure that the annual report was filed with our Office within 60 days of fiscal year end, as required.