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Taxpayers' Guide to State and Local Audits

Orchard Park Fire District – Ambulance Service (2011M-217)


Released: March 16, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review the internal controls over the District's financial operations for the period January 1, 2009 to May 26, 2011.

Background

The Orchard Park Fire District is a political subdivision and district corporation of the State, distinct and separate from the Town of Orchard Park in Erie County. The District is governed by an elected five-member Board of Fire Commissioners responsible for the District's overall financial management. The District's operating budget totaled $1.7 million for the 2011 fiscal year.

Key Findings

  • The District used public monies to purchase assets for and provide funding to a not-for-profit organization. In September 2009, the Board, by resolution, authorized the Chairman to sign documents to establish Orchard Park Fire District-EMS, Inc. (EMS, Inc.), a not-for-profit corporation. However, based on the absence of authority in Town Law or any other statute, we believe that fire districts are not authorized to form or cause the formation of this type of corporation.
  • The District also paid over $17,000 of legal fees for the creation of EMS, Inc., loaned EMS, Inc. $200,000, purchased (for $275,000) and maintained a separate building for EMS, Inc., provided EMS, Inc. with vehicles, reimbursed EMS, Inc. for unpaid charges incurred by Town residents and allowed length of service awards program (LOSAP) credits for volunteers providing services to EMS, Inc. We estimate the value of the District assets that were given, loaned or leased to EMS, Inc. since the entity was created to be over $1.3 million.

Key Recommendations

  • Discontinue subsidizing EMS Inc.'s operations by providing cash loans, paying expenses, or purchasing property and equipment for use by EMS Inc.
  • Discontinue reimbursing EMS, Inc. for the outstanding balance of medical bills of Town residents who were recipients of services by EMS, Inc.
  • Discontinue providing monetary per diem compensation, or providing LOSAP credit to volunteers who drive ambulances for EMS, Inc.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236