The Board failed to ensure fund balance was maintained within legally established limits and that residents were not taxed more than necessary. Although District officials appropriated on average $630,000 of fund balance in each of the last five fiscal years to reduce the tax levy, the District had operating surpluses in four of the five years reviewed. District officials then used excess fund balance to fund five reserves that, as of June 30, 2013, totaled over $2 million. One of the District's reserve funds had approximately $434,000 or 50 percent more than the amount needed for authorized purposes. Also, three of the District's reserves, with balances totaling approximately $775,000, were not supported by a plan setting forth the amounts to be retained, or when the balances would be used. As such, the District has not demonstrated a valid need for about 60 percent of the amounts set aside in these reserve funds.

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. The proposed budget does not include a tax overlay or provisions for infrastructure needs. There are budget gaps in the water and sewer funds which are planned to be funded by rate increases that have not yet been adopted. The amount of sewer rents revenue in the proposed budget has been increased without any supporting justification. The proposed budget complies with the tax levy limit.

Controls over the Company's fiscal activities were weak. The Board failed to provide adequate guidance to those responsible for receiving and depositing cash and exercised little oversight of the Treasurer and other officials who performed these duties. The Board's failure to provide oversight of the Company's fiscal operations creates a significant risk that Company disbursements may not be for appropriate purposes and that all moneys received may not be deposited and accurately recorded. Further, the Company used the Association's account to deposit moneys and purchase items for the Company that were not approved by the Board, overseen by the membership, or recorded in the Company's financial statements, which conceals those transactions from members, taxpayers and other interested parties.

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. However, the water and sewer funds' tentative budgets are not balanced, and include a deficit of more than $273,000 and $264,000, respectively, or almost 10 percent in each fund. Village officials told us they recognized the deficit, and planned to raise water and sewer rates to make up the difference. We recommend the Board address these deficits in order to avoid adopting budgets that include appropriations without sufficient financing sources. We had a similar finding in last year's budget and the Board did adjust the rate structure and reduced some expenditures; as a result of the actions taken by the Board, the funds are projected to not incur a deficit for the current fiscal year. In addition, the Village's tentative budget does not comply with the property tax levy limit.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. The 2014-15 preliminary budget includes the appropriation of $3.5 million of fund balance to help finance 2014-15 operations. District officials also plan to liquidate portions of the Tax Reduction Reserves in the 2014-15 budget. The District's actions are reasonable, given the current economic conditions. However, District officials must keep in mind that the continued reliance on using fund balance to fund District operations will eventually deplete fund balance. Finally, the District's proposed budget complies with the property tax levy limit.

The Board and District management are not effectively managing the District's financial condition and its reported financial position is declining. While the District's reported fund balance shows a deficit, most of its fund balance appropriations are not being used. District officials appropriated fund balance as a funding source for the past three years in amounts that were unnecessary and exceeded the fund balance actually available. As a result, at the end of 2012-13 fiscal year, the District's reported unassigned fund balance had declined to a deficit of $369,347. The District could improve its reported financial position by not appropriating unnecessary fund balance and, further, by appropriately transferring retired debt proceeds to the general fund. Additionally, the Board does not effectively monitor the budget throughout the year, and the Business Manager/Treasurer did not provide the Board with budget status reports or budget transfer reports.

Based on the results of our review, in general, 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 purpose of our audit was to review the projected cost and energy savings achieved by energy performance contracts (EPC) entered into by eight school districts for the period of October 1, 1998 through August 21, 2013.

Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. District officials have also taken some corrective action by preparing a projection of year-end fund balance for the food service fund while also improving the overall solvency of the fund. Finally, the District's proposed budget complies with the property tax levy limit because it includes a tax levy increase within the statutory limit.

The Board and District officials did not develop reasonable budgets. Revenue estimates were generally close to the actual revenues received. However, over the last five fiscal years, the District's general fund spent $21.7 million less than planned. As a result of these budgetary surpluses, the District did not use any of the appropriated fund balance planned to finance operations (an average of $3.5 million for each of the last five years). Instead, between 2008 and 2013, the District's total fund balance for the general fund increased $4.8 million while the real property tax levy also increased by about $4.8 million.

We found that District officials established adequate internal controls over payroll. District officials implemented specific procedures to ensure that individuals reported and paid on the payrolls were paid at their approved salaries and wages, and that they received only the benefits to which they were entitled.

The purpose of our review was to examine the County’s controls to safeguard and account for court and trust funds for the period of January 1, 2011 through January 1, 2014.

We reviewed the various resolutions, minutes of Board meetings and bond statements to ensure the Board took appropriate actions to authorize the issuance of the water and sewer revenue bonds. Furthermore, we examined the chief financial officer's (CFO) financial records to ensure the debt proceeds were properly allocated and expended from the various capital projects. We found the issuance of debt proceeds were properly authorized by the Board and the proceeds and related expenditures were appropriately accounted for by the CFO.

Court moneys were not properly recorded, deposited or reported to the Justice Court Fund during the audit period. We determined that the Court's liabilities exceeded the Justices' total available cash as of June 30, 2013, resulting in a shortage of $117,120. On the surface, the Court's records appear to be well kept. However, when we compared the Court's computerized data to the previously printed computerized cashbook reports on file for January 2009 through May 2013, we found that there were 830 receipts totaling $115,045 in the computerized data that did not appear on the printed cashbook reports, going as far back as May 2009. It also appeared that certain fines and fees were originally entered into the Court's computerized program when they were received, but were later altered to change the receipt dates to a different month, and the receipt numbers were deleted. Finally, we identified 16 cash receipts totaling $1,490 that were deleted from the computer.

Due to the Board's continuous lack of oversight of the Village's financial activities, the Treasurer was able to misappropriate as much as $83,000 of Village funds prior to detection. The Board has not established written financial policies and procedures to safeguard assets, which allowed the Treasurer to perform all cash receipt and disbursements duties without oversight. The Board and Mayor did not ensure that the necessary supporting documentation was attached to the claims prior to approving them for payment and that claims were for valid Village purposes. The Treasurer did not keep complete and accurate financial reports, perform bank reconciliations and file required reports with OSC.

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 slightly exceeds the statutory limit.

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, 2010 through January 1, 2014.

The Board did not effectively manage the Village's financial condition. The Board did not develop sound revenue budget estimates; it also failed to increase water and sewer rates, which drive the revenues in these funds. As a result, water and sewer revenues were overestimated by an average of 25 percent and 21 percent, respectively, which caused fund balance to decrease significantly in both funds from fiscal years 2009-10 through 2011-12. Unplanned operating deficits caused both the water and sewer funds to have a deficit fund balance. Over a four-year period, the deficit fund balance in the water fund grew by a total of $61,274, or 51 percent, while the sewer fund balance declined by a total of $42,974, or 132 percent. Although both funds had an operating surplus in the 2012-13 fiscal year, the funds still ended the year with deficit fund balances of $181,522 in the water fund and $10,424 in the sewer fund. The Village's general fund loaned moneys to these funds to offset the funds' deficit balances. Furthermore, the poor financial condition of the water and sewer funds has negatively impacted the cash flow of the Village's general fund.

The Board and Library Board have not adopted cash receipts policies requiring internal control procedures to be established and implemented. We identified weaknesses in the cash collection procedures at the Recreation Department, Clerk's office, Highway Department and Library. Management and employees developed cash collection procedures that were not consistent with good internal control practices, resulting in errors recording and reporting cash receipts without management questioning the errors or re-evaluating procedures. We also found that neither the Board nor Library Board audited and approved claims for payment. Instead, the Treasurer and his staff audited all claims against the Village and the Library. Checks were signed electronically using a single signature file containing facsimile signatures of the Mayor and a Village Trustee, with neither the Mayor nor the Trustee retaining custody of the signature file or being present during the affixing of the signatures. This arrangement is not in compliance with the law and allowed claims to be paid without a proper audit.

The Board did not properly monitor and manage the Village's financial condition. As a result, fund balance for all three major funds (general, water and sewer) decreased significantly from 2008-09 to 2011-12 due to operating deficits caused primarily by poor budgeting which resulted in revenue shortfalls and overspent appropriations. For example, the fund balance of the general fund dropped from $927,214 in fiscal year 2008-09 to a deficit of $39,827 at the end of the 2010-11 fiscal year before showing some improvement in the 2011-12 fiscal year. The Board also relied on fund balance and interfund loans to fund recurring operating expenditures. The Board also did not adequately monitor the budget and allowed appropriations to be overexpended for many line items and in total for the general fund budget. General fund appropriations were overexpended by $143,908 in 2011-12, $197,420 in 2010-11 and $313,832 in 2008-09. Although the 2009-10 budget was not overspent in total, several individual line items were overspent. The lack of monitoring also caused expenditures to consistently exceed appropriations in the water and sewer funds. Finally, the Board has not developed comprehensive, multiyear financial and capital plans to improve the budget development process.