Audits of Local Governments and School Districts
Westfield Volunteer Fire Department – Internal Controls Over Cash Receipts and Disbursements (2012M-59)
Released: July 27, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to evaluate the internal controls over the financial operations of the Westfield Fire Department and the Fire Companies that comprise the Department, for the period January 1, 2010, through February 9, 2012.
The Westfield Fire Department provides services for the Village of Westfield in Chautauqua County and provides fire protection services to residents outside the Village pursuant to a contract with the Town of Westfield. The Department has a Chief, two Assistant Chiefs, a Secretary and a Treasurer. The membership of the Department is divided into three fire companies, Cascade Hose Company, Citizen's Hose Company, and Hook and Ladder Company. Each of these Companies has a separate Treasurer.
- The financial operations of the Department were very poorly run and documented. The Department allows three individuals to manage Departmental bank accounts. We found that payments were not authorized prior to disbursement, receipts were not issued as required by the bylaws, and that debit cards were used.
- With respect to the fire companies, we found that all three lacked documentation of disbursements and any indication that requests for payment were approved by both the President and the Secretary prior to disbursement. Duplicate receipts were not issued for moneys collected, so officials could not ensure that all moneys were deposited in the respective bank accounts, and officials indicated that cash was withheld from deposits and used to pay expenses.
- Ensure that the Treasurer of the Department is responsible for all funds and accounts in the Department's name. Review claims and sign all orders for payments prior to disbursement by the Treasurer. Issue receipts for all funds received by the Department. Consider discontinuing the use of the debit cards.
- Issue duplicate receipts and maintain records of receipts and disbursements to account for all financial activity, and retain all supporting documentation. Approve disbursement documentation prior to payment being made by the Treasurer. Ensure that all payments made by the Company are in the form of a check, so that disbursements are adequately documented.
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