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$506,250, or 15 percent. However, annual operation and maintenance costs over the past three years averaged approximately $806,000 (Figure 2). Accordingly, at the contractual subsidy rate of 75 percent, the annual payment from DOCCS would be approximately $605,000, or an additional amount of over $98,000, but officials have not requested an increase. As a result, the Village did not realize potential revenues approximating $295,000 over the three years. Figure 2: Sewer Fund – Comparison of Actual Expenditures to DOCCS Contribution 2016-17 2017-18 2018-19 Total Expenditures a $929,220 $798,764 $690,837 $2,418,821 75 percent of Expenditures $696,915 $599,073 $518,128 $1,814,116 Less: DOCCS Annual Contribution $506,250 $506,250 $506,250 $1,518,750 Difference $190,665 $92,823 $11,878 $295,366 a Total expenditures have been adjusted from reported expenditures to include $35,754 in expenditures erroneously recorded in the capital projects fund in 2016-17; and to exclude debt-related principal and interest payments totaling $53,227 in 2018-19. Current officials told us that they were not aware that the DOCCS contribution amount should be addressed annually and continued billing DOCCS based on past practice. Because officials were not monitoring these contractual revenues and were overestimating revenues in the annual budget, the sewer fund experienced financial condition problems. The Board Did Not Allocate Shared Service Costs Equitably The Board did not ensure that the sewer fund paid its appropriate share for shared service costs or monitor actual expenditures to help ensure costs were allocated in an equitable manner. The Village’s three operating funds (general, water and sewer) share Department of Public Works (DPW) employees and certain other costs including payroll-related benefits (e.g., health insurance, retirement), insurance (e.g., general liability, workers’ compensation), vehicle replacements and administrative duties. Each fund includes its portion of the shared service costs in its operating budgets. For example, current payroll allocations are based on expected time spent by employees working in each department or vehicles purchased based on the amount of time used by each department. For the fiscal years 2014-15 through 2018-19, we reviewed payroll costs and shared service expenditures totaling approximately $1.18 million5 to determine 5 This amount is the sewer fund share of the combined operating funds’ total expenditures of approximately $3.19 million for 10 allocations. See Appendix B for the expenditures reviewed. 4 Of f ic e of t he New York State Comptroller