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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Lakeville Volunteer Fire Department – Internal Controls Over Financial Operations (2012M-234)


Released: February 15, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine internal controls over the District’s financial operations for the period January 1, 2011, to August 23, 2012.

Background

The Lakeville Volunteer Fire Department was established in 1921 and provides fire protection and rescue operations to the Lakeville Number 2 Fire District (District) as well as the South Lima Fire Protection District as contracted by the District. The Department is operated in accordance with its by-laws, and is governed by a seven-member Board of Directors (Board). The Department has approximately 45 members. The Department’s primary sources of revenue are bell jar and bingo profits, and donations. The Department’s revenues and expenses for the 2011 fiscal year totaled approximately $65,000 and $53,000, respectively.

Key Findings

The Board does not provide adequate oversight of the Department’s financial activities.

  • The Department Treasurer is responsible for recording all the Department’s cash receipts and disbursements in the online computerized financial software and preparing the monthly bank reconciliations for all of the Department’s accounts, including bingo, bell jar, and auxiliary. Although all the Board members have online access to review the Department Treasurer’s records, they do not do so. The Board does not review any of the bank reconciliations prepared by the Department Treasurer or annually audit or cause to be audited any of the Treasurers’ records.
  • The Board members had not adopted financial policies and procedures addressing cash receipts and disbursements, procurement, or claims processing, nor had they adopted a code of ethics or information technology policies.

Key Recommendations

  • Implement mitigating controls over the Treasurers’ lack of segregation of duties, such as regularly reviewing the financial software; or at minimum the activity log, and monthly bank reconciliations as compared to monthly reports, bank statements and the financial accounts. Periodically audit, or engage a person or firm to conduct an annual audit of the Department’s records.
  • Adopt written policies and procedures that establish a strong system of internal controls over the Department’s financial operations.

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