Audits of Local Governments and School Districts
Woodstock Fire Company Number Three, Inc. – Missing Funds and Executive Committee Oversight (2012M-141)
Released: October 12, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our audit was to evaluate the internal controls over cash disbursements and receipts and the Committee’s oversight of the Company’s financial operations for the period January 1, 2009, through February 29, 2012.
The Woodstock Fire Company Number Three, Incorporated is a volunteer fire company with approximately 26 members located in the Town of Woodstock in Ulster County. The Company is governed by an Executive Committee which comprises five officers and three Directors who are elected annually. In 2011, the Company received approximately $38,500 in revenues.
- We identified over $221,000 of Company funds that were apparently misappropriated from 2006 to 2011, which is more than the $190,000 of total funds deposited in the Company’s bank accounts during that time period. This occurred because the Committee did not provide effective oversight of the Company’s financial resources.
- The former Treasurer did not provide a written report of disbursements, as required by the by-laws, to the Committee each month and expenses were approved for payment by the Committee without reviewing the available invoices.
- The Company’s by-laws require that an audit committee review the Treasurer’s records at least twice a year. However, the President failed to appoint an audit committee to perform this function.
- Prohibit checks being made payable to cash. Review all invoices and receipts for reimbursement prior to disbursement and retain them on file for audit purposes. Review bank records to ensure that transactions listed agree to disbursements approved.
- Provide oversight of financial transactions, approve individual invoices and properly monitor the Treasurer’s activities.
- Appoint an auditing committee annually that audits the Treasurer’s records, verifies bank balances and reports its findings to the membership as required.
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Address: Office of the State Comptroller, Division of Local Government and School Accountability
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