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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Newstead Fire Company –Internal Controls (2014M-92)


Released: June 27, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to assess the adequacy of Company financial controls for the period January 1, 2012 through February 18, 2014.

Background

The Newstead Fire Company is a volunteer organization located in the Town of Newstead in Erie County. The Company contracts with the Town to provide fire protection and emergency services and also receives moneys from fundraising, hall rentals, donations, and foreign fire insurance. For the 2013 fiscal year, the Company’s revenues totaled $459,425 and expenses were $365,583. The Company is governed by an elected Executive Board of Directors comprising 12 members.

Key Findings

  • The Board did not authorize 564 disbursements, totaling more than $650,000, out of the 942 reviewed. Fifty of the disbursements reviewed lacked sufficient documentation.
  • The Board did not review the Treasurer’s reconciled bank statements.
  • For two disbursements, a Company member or a family member had a financial interest in the transaction. These Company members did not properly disclose their interests in a written disclosure to the Board, as required by the code of ethics.
  • Company officials did not maintain appropriate records from fundraising activities. As a result, Company officials have no accountability for how much cash was actually collected, or how many prizes were purchased and distributed.

Key Recommendations

  • Authorize bills prior to payment and ensure that each bill has appropriate supporting documentation.
  • Review the Treasurer’s monthly bank reconciliations.
  • Ensure Company members submit a written disclosure to the Board when they have any direct or indirect financial interest in a vendor that the Company uses or plans to use to disclose their interest in the vendor.
  • Maintain detailed financial records for each fundraising event indicating the start-up money provided, used (with supporting documentation) and returned; tickets distributed and sold; prizes purchased and awarded; and the number of attendees at the event.

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