Director Briefing - June 30, 2025

The Supervisor did not maintain complete, accurate and timely accounting records and reports. The Supervisor’s failure to maintain complete and accurate records or adequately provide monthly reporting to the Board reduced transparency and prevented it from properly monitoring financial operations and increased the risk that unauthorized or inappropriate transactions could occur and go undetected.

• The Town’s accounting system was not properly set up and financial activity was not recorded using proper accounting procedures. Due to accounting errors, the Town’s fund balance accounts had errors totaling $833,153. For example, the general town-wide fund was understated by $337,470 and the highway part town fund was overstated by $363,081.
• The Supervisor filed an incorrect Annual Financial Report (AFR) and did not file the AFR on time.
• The Board did not audit the Supervisor’s records as required by New York State Town Law (Town Law) Section 123. The accounting errors and untimely filing may have been detected had the Board annually audited the Supervisor’s records.

The Board did not effectively manage the Town’s fund balance and continued to unrealistically estimate revenues and appropriations in the adopted budgets. The Board did not correct the deficiencies noted in our prior audit (Budgeting and Financial Oversight (2015M-158), released November 2015), adopt written fund balance or reserve policies and did not properly establish reserves. In addition, the Board did not ensure it received up-to-date, accurate financial reports in a timely manner, which hindered its adoption of realistic budgets and multiyear financial or capital plans.

As a result, officials maintained significant unrestricted fund balance in the town-wide (TW) and town-outside-village (TOV) funds that as of January 1, 2024 were sufficient to fund the entire 2024 budgeted appropriations. Also, the water fund had a deficit fund balance of $80,597.

We project that the Town will have small operating surpluses in 2024, which will increase the significant fund balances. The Board continued to unrealistically estimate revenues and appropriations in the 2025 budget, which will likely result in operating surpluses that will further increase the significant fund balances in the general and highway TW and TOV funds.

The Town Board (Board) and officials did not develop and adopt an IT contingency plan or breach notification policy, periodically test data backups or provide employees with security awareness training. Sensitive IT control weaknesses were communicated confidentially to officials. As a result, the Town’s IT systems and its personal, private and sensitive information (PPSI)1 may be accessible to unauthorized use, access and loss. Officials also have minimal assurance that in the event of a disruption or disaster (e.g., a ransomware attack), employees and other responsible parties would be able to react quickly and effectively to help resume, restore or repair critical IT systems or data in a timely manner.

Officials also did not monitor employee Internet use. Although the Town’s Computer and Internet Use Policy in the employee manual prohibits employees from using Town-owned computers for personal use, officials and employees were not in compliance with the policy. We reviewed Internet histories on eight Town employee computers, and all eight employees used the computers to access websites for personal use, such as news and advertising, personal online banking and finances, entertainment and travel, shopping, social media and streaming platforms.

Weaknesses in policies, oversight and other internal controls increase the risk that hardware or software systems may be lost, damaged or compromised by unauthorized or inappropriate access and use.

District officials did not accurately and completely record and account for all capital assets we reviewed (i.e., machinery, vehicles, equipment and computers). Additionally, officials have not conducted a physical inventory to properly monitor and account for assets since 2011.Therefore, officials cannot assure taxpayers that all of the District’s capital assets are safe and accounted for. As a result, the District had significant risk for capital assets to be lost, stolen or misused.

• 112 capital assets with an acquisition cost of $60,871 were not recorded on the District’s inventory list.
• Of the 7,229 capital assets on the District’s active and disposed inventory list, we reviewed 254 and found 195, (77 percent), were not properly accounted for or monitored.
• 21 assets with an acquisition cost of $16,931 and 48 information technology (IT) assets could not be located. The acquisition costs for the 48 IT assets were not recorded or available. See Appendix A for a list of missing assets.