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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Audits of Local Governments and School Districts

Town of Poland – Internal Controls Over Vehicle Fuel Inventory (2013M-386)


Released: February 28, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to determine if the Town was adequately safeguarding its fuel inventory for the period January 1, 2012 through November 27, 2013.

Background

The Town of Poland is located in Chautauqua County and has a population of approximately 2,400. The Town is governed by the Town Board, which comprises four elected council members and an elected Town Supervisor. The Town’s budgeted appropriations for the 2013 fiscal year totaled $1.08 million.

Key Findings

The Town maintains two above-ground fuel storage tanks at its highway facility: a 1,500-gallon tank for diesel fuel and a 500-gallon tank for gasoline. From January 2012 through October 2013, the Town purchased 24,000 gallons of fuel costing approximately $80,000.

  • The Town does not maintain perpetual inventory records to show the amount of fuel remaining in inventory at any given time, and it does not take periodic physical inventories for reconciliation purposes. We performed an analysis of the Town’s fuel purchases and usage records. We determined that approximately 7,100 gallons valued at $23,500 were unaccounted for.
  • We also found apparent errors in the fuel usage records.
  • The Town has not taken measures to provide physical security over fuel. There are no procedures in place to record the distribution of fuel shed keys. Also, because the distributed keys can be duplicated, there is no assurance that an inventory would identify all of the keys that exist. Additionally, once the shed is opened, there is unrestricted access to the fuel tanks.

Key Recommendations

  • Further investigate the 7,100 gallons of unaccounted-for fuel and take appropriate action to improve security over fuel supplies. Develop policies and procedures to safeguard vehicle fuel.
  • Ensure that vehicle fuel inventory records identify the beginning inventory and the quantities of fuel delivered, dispensed, and on hand. Periodically reconciled to physical inventories of fuel on hand and promptly investigate and resolve any differences.
  • Consider changing the locks and issuing numbered keys that cannot be duplicated. Maintain an inventory of the distribution of numbered fuel shed keys. Take appropriate action to reduce access to the fuel shed.

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