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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

West Hill Fire District No. 3 – Financial Condition (2014M-160)


Released: August 15, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the District’s financial condition for the period January 1, 2012 through March 6, 2014.

Background

The West Hill Fire District No. 3 is located in Chemung County and serves approximately 700 residents. The District contracts with the City of Elmira and Big Flats Fire District No. 1 to provide fire protection services to District residents. The District’s 2014 budget appropriations are $55,275, which are wholly funded through real property taxes. The Board of Fire Commissioners consists of five elected members, with one member appointed as Chairman.

Key Findings

  • At the end of 2013, the District’s unassigned fund balance totaled almost $178,000 or more than 3 times the 2014 budget appropriations. This occurred primarily because in 2008 and 2009 the District received unexpected insurance proceeds totaling about $157,000. Further, the Board currently has no plans to use a portion of the existing unassigned fund balance to reduce future real property tax levies.
  • The District reported a capital reserve fund with a balance of $165,728 as of December 31, 2013. District officials created this reserve in the late 1990s to fund future costs of new vehicles. However, the Board could not provide us with a resolution or any other documentation to show when or if this reserve fund was properly established. Further, District officials have not established any plans for using the money accounted for as a reserve fund.

Key Recommendations

  • Use the unassigned fund balance identified in this report in a manner that benefits taxpayers.
  • If the Board determines that the existing reserve fund was not established in compliance with statutory requirements, it should take necessary steps to ratify and legalize the reserve fund by following the procedure for establishing a capital reserve fund in conformance with the procedures in GML, including voter approval requirements. If the reserve is no longer needed, the Board should consider transferring money into other reserve funds to the extent permitted by GML or, if the Board determines that the District will have no foreseeable expenditures from such other reserve funds, consider requesting a special act of State Legislature to authorize release of the reserve fund money to unassigned fund balance.

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