Apparent Misappropriation of Funds
We found that the Treasurer apparently diverted moneys received on behalf of the District into bank accounts held by him, and he disbursed moneys from District accounts for unauthorized purposes. The Treasurer did not respond to our attempts to meet with him to discuss these apparent misappropriations. The Treasurer also admitted to paying himself stipends exceeding the amount of compensation approved by the Board. As a result of these actions, we identified approximately $119,000 of District moneys that the Treasurer apparently misappropriated over a 10-year period. The Treasurer was able to apparently misappropriate District funds in large part because the Board did not establish effective internal controls over cash receipts and disbursements or monitor the Treasurer’s activities. We have referred these matters to law enforcement for investigation. Bolivar Joint Fire District[complete audit - pdf]

Internal Controls Over Financial Activities and Information Technology
The Board and District officials did not always follow the Board’s adopted procurement policy with respect to competitive bidding and documenting verbal and written price quotes for purchases not subject to competitive bidding requirements. Also, the Board did not provide adequate oversight over District procurements to ensure that District officials were complying with the policy. The Board also did not adequately segregate the Treasurer’s duties related to financial transactions and did not oversee the Treasurer’s financial duties to mitigate the control risks associated with an inadequate segregation of duties. The Board did not enforce its written payroll policies, and the Treasurer is responsible for most aspects of payroll processing with no oversight by District management. Finally, the Board did not adopt and implement IT policies addressing acceptable use of computer resources and a disaster recovery plan. In addition, District officials did not ensure physical security over the District’s server room. Coram Fire District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board did not follow all applicable laws and regulations and did not provide taxpayers with accountability when it entered into a standard commercial loan with a financial institution for a rescue pumper. The Board entered into a loan agreement that exceeded the voter-approved $600,000 limit by $100,000, and exceeded the approved 72 month term by 12 months. Furthermore, the Board used $200,000 of the amount loaned at 5 percent to pay off a 4.75 percent loan from 2005, which unnecessarily increased the cost to taxpayers by $25,750. We also found that the Board did not properly audit claims prior to payment, and the Treasurer’s responsibilities were not properly segregated. Finally, District officials need to improve internal controls over purchasing. We found that the District paid three professional service providers a total of $72,150 without soliciting competitive proposals. Levittown Fire District[complete audit - pdf]

Internal Controls over Financial Activities and Information Technology
The Board did not carry out its responsibility of overseeing or establishing appropriate compensating controls over District financial operations. The Board has not established policies and procedures to adequately segregate the Treasurer’s duties related to financial transactions and does not oversee the Treasurer’s financial duties to mitigate the control risks associated with an inadequate segregation of duties. The Board has not established an internal control system that provides for an adequate segregation of duties or management oversight for payroll processing and accounting for leave time accruals. The Board’s purchasing policy did not require the District to solicit competition before awarding professional service contracts. The Board also has not adopted formal policies relating to the costs associated with the District’s annual installation dinner. In 2008 and 2009, individuals who were not members of the West Islip Fire Department or their spouses attended the dinners, resulting in additional costs to the District of approximately $17,900 in 2008 and $22,100 in 2009. Finally, the District’s internal controls over computerized data also need to be improved. West Islip Fire District[complete audit - pdf]

Internal Controls Over Credit Cards and Vehicle Fuel
Internal controls over credit cards are not adequate or operating effectively. Although the Board adopted a credit card policy for the issuance and use of general purpose credit cards and fuel credit cards, we found that a general purpose credit card was issued to an unauthorized individual who used the card to make purchases totaling $319 over a two-month period. In addition, 16 general purpose credit card purchases totaling $1,974 and 35 fuel card purchases totaling $1,708 were not supported by invoices or receipts, as required. Finally, we found that the credit card policy does not include adequate procedures to monitor fuel card usage. District officials have established some controls over diesel fuel inventory. However, the Board has not developed written policies that describe the rules that must be followed, the records that must be maintained, and the procedures that must be performed to achieve adequate safeguards for vehicle fuel. West Sayville-Oakdale Fire District[complete audit - pdf]