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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Golden Glow Volunteer Fire Company – Internal Controls Over Financial Operations (2012M-170)


Released: January 25, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine selected Company financial operations for the period January 1, 2011, through May 31, 2012.

Background

The Golden Glow Volunteer Fire Company, Inc. is located in the Town of Big Flats in Chemung County. The Company has approximately 40 members. The Company currently has two existing fire stations and is building a new fire station that is near completion. The Company’s revenue for the 2011 fiscal year totaled approximately $41,500 and operating expenditures totaled approximately $20,100. The officers of the Company consist of a President, Vice-President, Secretary, Treasurer, and three Directors all who are elected by the membership.

Key Findings

  • The Company did not adequately plan for the construction of the new fire station. Because the Company did not solicit competitive bids for this large building project, it cannot be assured it obtained the best price. Furthermore the Company’s plan to repay the debt issued to finance construction is based on contingencies such as the sale of the two existing fire stations, continuation of increased rent from the District, and fundraising in amounts that far exceed amounts raised in the past.
  • The Officers and Directors had not established written policies and procedures governing cash receipts and disbursements. As a result, the Treasurer’s duties are not adequately segregated and there is a lack of ongoing, regular oversight by the Officers and Directors as a compensating control.

Key Recommendations

  • Develop contingency financial plans in the event that the sale of the existing firehouses and increased fundraising plans do not happen as planned.
  • Develop comprehensive written policies and procedures for controls over the Company’s cash receipts and disbursements. The Treasurer’s duties should be segregated or compensating controls should be established to routinely monitor and review the Treasurer’s work. Compensating controls could include someone independent of financial responsibilities reconciling the bank statements and reviewing and approving electronic fund transfers.

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