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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Union Fire Company #2 Inc. – Financial Operations (2012M-205)


Released: January 11, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to evaluate internal controls over the Company’s financial operations for the period April 1, 2011, to May 15, 2012.

Background

The Union Fire Company #2, Inc. is a volunteer organization located in the Village of Ballston Spa, Saratoga County. The Board of Directors, which is responsible for the Company’s overall general and financial affairs, consists of the Foreman, 1st Assistant Foreman, 2nd Assistant Foreman, Recording Secretary, Financial Secretary, and Treasurer. For the fiscal year ended March 31, 2012, the Company received approximately $74,000 in revenue, including $20,800 in foreign fire insurance premiums, and disbursed approximately $67,000.

Key Findings

  • The Company’s Constitution and by-laws have not been updated since 1978 and do not include authorization for the compensation currently paid to the Financial Secretary, Recording Secretary, Treasurer and Steward.
  • Check registers are not maintained to document bank deposits, withdrawals, or cash balances. A revenue ledger is not maintained, bank reconciliations are not performed, and the bank statements are not reviewed by anyone other than the Treasurer.
  • Adequate internal controls have not been established over fundraising activities.
  • The Board did not review and approve all bills prior to payment or evidence their approval in the minutes. We found no authorization in the minutes or elsewhere for $7,500 of non-check bank withdrawals that occurred during our audit period.

Key Recommendations

  • Update the Constitution and by-laws to reflect all policy and procedural changes that have occurred since 1978 and annually authorize compensation amounts to be paid to the Treasurer, Financial Secretary, Recording Secretary, and Steward.
  • Maintain complete records including a revenue ledger and check registers that include deposits, other withdrawals or credits, and a current balance. Perform bank reconciliations of all bank accounts monthly and present them to the Board for review.
  • Ensure that cash reports and supporting duplicate receipts be maintained for fundraising activities.
  • Review all Company disbursements and require adequate and detailed documentation to support all disbursements.

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