We found that the Board generally ensured that Company funds were properly deposited and disbursed. The Board-adopted bylaws established adequate controls over Company funds. The Board also hired an independent auditor and appointed a committee; each individually performed an annual audit of the Treasurer's records. However, both audits did not have procedures in place to obtain or review cancelled check images. Therefore, these audits could not effectively ensure disbursements were paid to Company vendors. Additionally, adequate documentation of the President's approval for disbursements was not always kept.

The Board complied with applicable laws, rules and regulations including the adoption of a code of ethics. The Board adopted bylaws, and established procedures to ensure receipts were deposited and accurately recorded and disbursements were for legitimate Company purposes. The Treasurer maintains complete, accurate and timely records and presents monthly reports of Company financial activities to the Board. Except for minor weaknesses which we discussed with Company officers, we determined that controls are adequate to ensure moneys are safeguarded and financial activity is properly recorded and reported.

The Board needs to improve controls over cash management to adequately safeguard cash collected in three Town departments. The Town does not have effective policies and procedures to ensure that departmental cash is properly protected by the Receiver, the Clerk and Waste Management departments. Additionally, job duties in these departments were not adequately segregated and proper bank reconciliations were not performed. The Board also did not ensure that Town officials followed statutory bidding requirements and the Town's procurement policy. We identified $115,529 in purchases that were not properly bid as required by law and approximately $24,000 in purchases that were made without obtaining quotes as required by Town policy. Further, officials did not develop and follow formal procedures for obtaining professional services and did not have written contracts in place with all professional service providers. In addition, Town officials did not ensure that employees were paid correctly or that leave accrual records were accurate, because controls over payroll and leave time were not properly designed or operating effectively. While the Board adopted policies and procedures over timekeeping, it did not ensure that these policies and procedures were followed. As a result, Town officials spent more than $157,000 on a timekeeping system that was not used effectively. Finally, the Board has not established adequate policies and procedures for maintaining leave accrual records or monitoring leave accruals earned and used.

The Board has not provided adequate oversight of Library operations. It has not established appropriate controls over the authorization and payment of overtime. We found that part-time employees worked 830 hours of overtime without necessary management approval. Part-time employees received over $21,000 of overtime payments for overtime work that was not properly approved by management. Furthermore, we found that the Board did not provide prior approval for eight of 12 programs held at the Library in 2013. In addition, the Board did not ensure that all program performers/presenters signed contracts with the Library and submitted the required applications for use of the Library facility as required by Board policy. We also found that the Board spent $8,500 for four Board members and a Board member's relative to travel to an event in Birmingham, Alabama that may not have been for official Library business. The Library also does not have an accurate and complete inventory record that is periodically reconciled. As a result, the Board was unaware that laptops valued at $1,699 each and assigned to two Board members had been stolen; one within days of the Board member receiving it, and the other from the Board member's relative in North Carolina. We also found that the Board did not implement policies or procedures to help properly classify individuals as independent contractors or employees. Finally, the Board did not have adequate controls over the disbursement process and did not audit and approve claims before payment.

The former Chief left Town service in September 2011, and the highest ranking sergeant took over the Chief's responsibilities at that time. However, the Town did not hire a replacement until April 2013. During this time, Department employees did not comply with established procedures regarding payroll, creating an environment that allowed errors and irregularities to occur. Specifically, all eighteen officers did not sign the member attendance record, or sign-in sheets, 746 times, and overtime of approximately $19,300 was not properly documented. In addition, an officer working for another entity had time overlaps of about 47 hours totaling $2,153. We also found six instances where a full-time officer scheduled to work did not appear to have worked the hours claimed on his timesheet. This officer received payment, at his higher rate, while a part-time officer who was not on the schedule worked in his place, but did not claim or receive payment for time worked. Additionally, four officers, including a sergeant, were given a total of 11 chart days (paid days off due to scheduling) totaling approximately $3,300 to which they were not entitled. Furthermore, these four officers claimed and received a total of $240 in Officer-In-Charge pay to which they were not entitled. Finally, leave time was not properly managed. Leave time records maintained at the Department did not match those in the Town payroll register.

We found that the Board has established adequate internal controls over the departmental processing of cash collections. We commend Town officials for designing and implementing an appropriate system of controls over departmental cash receipts.

The District's Point System is not consistent with GML. District officials did not implement standards and procedures to ensure that the records maintained for activities performed under the Point System were accurate and complete. District officials also did not ensure that District employees were not granted LOSAP points for performing activities as volunteer firefighters during their regularly scheduled work hours. Our review of LOSAP records for 23 of the District's 73 LOSAP participants showed that none of these 23 volunteer firefighters received accurate LOSAP points. In addition, three volunteer firefighters, who are also District employees, were incorrectly granted LOSAP points for performing activities during their regularly scheduled work hours.

The purpose of our review was to determine whether County officials have established appropriate controls to safeguard and account for court and trust funds for the period January 1, 2013 through January 1, 2014.

We found that the Board does not provide adequate oversight of the Company's financial activities. Further, the President did not appoint a finance committee to review and approve Company bills or the Treasurer's records as required by the bylaws. While the Treasurer verbally presented all bills for payment to the Board, the Board did not actually review the bills for payment. Also, the Treasurer did not submit written monthly or annual financial reports to the Board. The Board's lack of internal controls over financial activity creates a risk that Company disbursements may not be for appropriate purposes and that all money due the Company may not be received and deposited.

The Supervisor did not maintain complete, accurate and up-to-date accounting records because he did not properly oversee the bookkeeper's work. As a result, the Supervisor did not provide the Board with the monthly financial information of cash balances for the Town's accounts, bank reconciliations and the required detailed statement of moneys received and disbursed. We also found that certain account balances in the Town's general ledger did not agree with its audited financial statements. The annual audit performed by an independent certified public accountant (CPA) is not reliable because the CPA told us that he did not assess internal controls. In addition, the CPA audits did not ensure that financial records were complete and did not properly account for Justice Court revenue. The Town's poor accounting records have created an environment where the Town's financial condition cannot be effectively assessed or monitored. Finally, the Board and the Supervisor did not ensure that all disbursements were for proper Town purposes. The bookkeeper performs, or has the ability to perform, all aspects of the disbursement process. We identified disbursements totaling almost $6,100 that were not properly reviewed or approved by the Board.

While District officials generally had effective controls over the use of District fuel cards, they inappropriately paid more than $11,000 in federal, State and local taxes on fuel purchases. District officials were unaware that that they were being charged these taxes on their fuel purchases from both vendors. By paying these taxes on its fuel purchases, the District incurred unnecessary costs.

We found that District officials established adequate controls over payroll and leave accruals. District officials implemented specific procedures to ensure that duties were segregated, employees were paid at their approved salaries and wages and received the benefits to which they were entitled, and individuals reported and paid on the payrolls were bona fide District employees.

We found that the Treasurer generally maintained adequate financial records. However, the Treasurer has not filed the annual update document (AUD) with the State Comptroller's Office for 2010, 2011, 2012 and 2013 as required by GML. The Treasurer made 106 disbursements totaling $113,069 during our audit period. We reviewed 26 disbursements totaling $12,327. Except for two payments to the fire chief totaling $1,000, we found that the disbursements were for proper District purposes. The Treasurer told us the $1,000 payments to the fire chief were for administrative duties. It is our understanding that the chief performed these administrative services as a District employee in a position separate and apart from the position of chief. In addition, we believe that the Chair also had a prohibited interest in the turnout gear contract and received an indirect monetary or material benefit as a result of the contract. As a member of the Board, the Chair has one or more powers and duties that can give rise to a prohibited interest, such as the duty to negotiate, authorize and approve the claim and/or audit the claim.

Our audit identified significant weaknesses in the Department's internal controls which allowed certain records, reports and supporting documentation to be inadequate. The Board did not provide adequate oversight of Department financial activities, and did not perform an annual audit of the Treasurer's books as the bylaws required. While we found no evidence that Department funds were misused, the weak control environment provides ongoing opportunity for potential theft without detection. For example, the Treasurer could not prepare appropriate reports to substantiate the accuracy of revenue received and deposited from the Department's biggest fund-raiser, because receipts from sales were not properly tracked. Furthermore, cash advances and deposits could not be reconciled with ticket sales and proceeds received because there were no suitable records to substantiate them. As a result, $1,365 in cash advances could not be properly accounted for.

The Treasurer did not use press-numbered receipts and did not deposit receipts collected on a timely basis. The Treasurer also did not prepare timely, accurate monthly financial reports for the Board's review; complete bank reconciliations; and submit an accounting of the District's financial activities to the Board at the annual organization meeting. The Board did not ensure that all claims were proper District expenditures. We reviewed 20 vouchers totaling $18,354 and determined that all had at least one deficiency. Further, no one prepared a claims abstract for the Board's review and gas purchases were not supported with documentation to ensure that they were appropriate District expenditures. These deficiencies occurred because the Board did not establish adequate controls over claims processing. Specifically, the Board has not adopted policies and procedures to guide employees when making purchases and handling claims. District officials did not use a competitive process to hire three professional services providers who were paid $15,297 during our audit period. District officials also did not obtain the required number of competitive quotations for 10 purchases totaling $23,921. Further, in fiscal year 2013 the District made $1,716 in purchases from a Commissioner's store. The Commissioner had a prohibited interest in this contract with the District.

The Council does not provide adequate oversight of the Company's financial activities. While the Council adopted the Company's bylaws, which dictate the manner in which operations are to be conducted, these procedures are insufficient. This is especially true given the concentration of financial duties with the Treasurer. The bylaws provide no guidance for addressing cash receipts and disbursements, auditing claims, using debit cards, auditing the Treasurer's records and conducting fund-raising activities. The Council also does not regularly review the bank statements and canceled checks as a way to mitigate the risk posed by the Treasurer having sole responsibility for financial record keeping and custody of Company funds. Additionally, the Council did not ensure that the Secretary included adequate details in the Department's minutes to identify that Company purchases were properly authorized, or that the Treasurer maintained an accurate account of all finances and submitted financial reports as required by the bylaws. Further, the Council did not adopt a code of ethics as required by law.

Internal controls over cash disbursements were not properly designed and operating effectively. Cash disbursement duties were not properly segregated, because the Comptroller maintained the Town's records, had custody of cash (i.e., the ability to disburse funds) and performed bank reconciliations. The Comptroller disbursed cash totaling $596,577 during our audit period. Although these payments were for proper Town purposes, by statute the Supervisor is required to disburse Town money. In addition, the Supervisor disbursed questionable payments totaling $9,340. Finally, the Board did not annually audit the Comptroller's records.

Water customers were not billed in accordance with the Code. Village officials did not collect late fees totaling $3,600 for 155 bills because they allowed an additional grace period after the 30-day payment period and also did not collect one percent late fees after 60 days. Village officials also did not bill two commercial customers because those customers had broken water meters. As a result, one commercial customer received $400 of free water and a second customer received an unknown amount of free water from two meters over the course of two billing cycles.

The Board is not properly overseeing the Village's financial operations, which has resulted in a weak control environment. The Board is not sufficiently segregating the financial duties of the Clerk-Treasurer or Deputy Clerk or implementing compensating controls to mitigate risks. The Board also is not implementing corrective action to weaknesses identified in the certified public accountant's report. In addition, the Board does not receive or request sufficient financial information from the Clerk-Treasurer. As a result, the Board is unable to monitor the Village's financial operations or prepare realistic budgets, which has caused the Village's unreserved fund balances in the general and water funds to total $350,000 and $200,000, respectively, which are excessive. The Board also does not ensure the Clerk-Treasurer files the annual financial reports or tax cap calculations in a timely manner. In addition, controls over IT are not adequately designed to ensure the Village's IT assets and computerized data are safeguarded. The Board also has not adopted a comprehensive disaster recovery plan or procedures for the sanitization of hard drives and other electronic media before disposing of them.

The Board and District officials are not developing budgets that provide realistic financial plans or effectively managing the District's fund balance. For the three-year period ending June 30, 2014, District officials budgeted to use $2.6 million of fund balance to finance District operations; however, due to unrealistic appropriation estimates, they did not use any of this appropriated fund balance during this period. As a result, the unassigned fund balance exceeded the statutory maximum of 4 percent of the ensuing year's budget, ranging from 8 to 13 percent. In addition, the District has three reserve funds with excessive balances and no plans or policies for the use of reserves.