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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Caledonia Fire Department – Internal Controls Over Financial Operations (2013M-356)


Released: March 14, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to assess the Department Board of Directors’ oversight of the Department’s financial operations for the period January 1, 2012 through October 16, 2013.

Background

The Caledonia Fire Department is located in the Town of Caledonia in Livingston County, and is governed by a five-member Board of Directors. The Department reported expenditures totally approximately $62,500 for the 2012 fiscal year.

Key Findings

  • The Department has not adopted written policies and procedures for financial operations other than the by-laws, which were not adequate or consistently followed. The Board also failed to adopt the statutorily required code of ethics.
  • The by-laws do not address all areas of financial operations and contain contradictory provisions related to the responsibilities for check signing and purchase order approvals.
  • The Treasurer did not present to the Board financial records, detailed reports, bank statements or reconciliations of the Department’s bank accounts.
  • Numerous vendor payments reviewed had deficiencies, including payment before the purchase order was approved and lack of documentation.

Key Recommendations

  • Adopt and enforce written policies and procedures that establish a strong system of internal controls over the Department’s financial operations. This should include compensating controls over the Treasurer’s unsegregated duties, such as regular reviews of financial records and reports, bank statements and reconciliations. The Board should also adopt a code of ethics.
  • Review and update the by-laws to eliminate contradictory provisions and align the by-laws to the current practices and needs of the Department. The Board should also monitor operations to ensure that the Department is in compliance with the by-laws.
  • Maintain complete, current and accurate financial records for all Department activity, complete and document bank reconciliations, file the report on foreign fire insurance tax moneys annually and provide the Board with timely and detailed monthly and annual financial reports.
  • Ensure that all disbursements are properly supported with appropriate documentation and authorization before payments are made.

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