Round Lake Hose Company No. 1 Inc. – Internal Controls Over Financial Operations (2012M-08)
Released: April 13, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to examine the District’s internal controls over selected financial operations for the period June 1, 2010, to November 8, 2011.
The Round Lake Hose Company No. 1, Inc. is located in the Town of Malta and the Village of Round Lake in Saratoga County. The Company is governed by a seven-member Board of Directors (Board) which includes a President, Vice President, Secretary, Treasurer, Fire Chief, and two Trustees. The Company’s operating expenditures for the 2011 fiscal year totaled approximately $140,000.
- The Board had not established adequate written policies and procedures governing cash receipts and disbursements.
- The Treasurer’s duties were not adequately segregated. The Treasurer was responsible for maintaining all the Company’s bank accounts and handling all moneys received and disbursed by the Company, including preparing financial reports. Even though the Board had established requirements that the Treasurer deposit all money within five days of receipt and all Company checks contain two signatures, those controls did not effectively mitigate the overall weaknesses resulting from the lack of segregation of duties.
- Establish comprehensive written policies and procedures for controls over the Company’s cash receipts and disbursements.
- Segregate the Treasurer’s duties or establish compensating controls to routinely monitor and review the Treasurer’s work.
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