Audits of Local Governments and School Districts
Three-G Volunteer Fire Company, Inc. – Internal Controls Over Financial Activities (2012M-131)
Released: October 5, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to examine the internal controls over the Company's financial operations for the period January 1, 2011, to February 29, 2012.
The Three - G Volunteer Fire Company, Inc. is located in the Towns of Martinsburg and Greig in Lewis County. The Company is governed by a nine-member Board of Directors, including the Board President. In the 2011 fiscal year, the Company's deposits totaled $212,114, of which $109,268 was from fire protection contracts and other support received from the three towns serviced by the Company. Disbursements made by the Treasurer during 2011 totaled $202,332.
- 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.
- Although the Company's by-laws provide for limited controls over cash disbursements, Company officials did not comply with the by-laws.
- Company officials allowed for the unmonitored use of debit cards.
- Provide oversight over the duties performed by the Treasurer throughout the year including a review the Company's bank statements/cancelled checks, monthly bank reconciliations, and other financial records.
- Adopt written policies and procedures for handling cash receipts and processing cash disbursements.
- Eliminate the use of debit cards or revise the Company by-laws to permit their use and establish controls to address the inherent risk associated with debit cards.
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