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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

12/19/14, Contact: Press Office (518) 474-4015

DiNapoli: Audit Reveals Theft of Cash, Questionable Spending by Minetto Volunteer Fire Dept. Chief

The chief of the Minetto Volunteer Fire Company in Oswego County spent nearly $6,000 in public funds on personal purchases such as guns and motorcycle parts, according to an audit released today by State Comptroller Thomas P. DiNapoli. The audit revealed a total of $22,000 in misused funds, questionable spending and missing cash.

Joseph Smegelsky Jr., was charged in July with grand larceny in the third degree, a class D felony, by the State Police and Oswego County District Attorney based upon DiNapoli’s examination.

“This individual had keys to the cash register and went on a spending spree with the fire company’s money,” said DiNapoli. “Residents trust public officials to safeguard their tax dollars and spend them appropriately. Far too often we find that without proper oversight in place, it can be easy for public funds to be misspent or go missing. My team of auditors and investigators will continue to work closely with law enforcement to hold individuals like this responsible for their actions.”

DiNapoli’s office found that, from Jan. 1, 2012 through Dec. 31, 2013, Smegelsky used the department’s debit cards and checks to make more than $5,800 in improper purchases, including guns, motorcycle equipment and items to support his personal landscaping business. Auditors also identified $4,300 in questionable payments that had no supporting documentation to indicate that they were for valid business purchases.  

In addition, Smegelsky claimed to have “sold” items to the department and received $8,500 in payments for things such as used helmets, jackets, pants and boots.

The audit also revealed that Smegelsky:

  • Cashed a $1,863 refund check due to the fire company for overpaying a vendor;
  • Failed to deposit $1,100 in cash from company vending machines; and
  • Made $982 in fuel purchases in excess of what was authorized for his personal vehicle using company funds.

DiNapoli said this theft went undetected because the company did not maintain records and reports that accurately reflected the company’s financial activity. For example, the company treasurers did not maintain any cash balances in the records and did not perform bank reconciliations. Auditors also found that the treasurer’s monthly reports to the board were not adequate for monitoring financial operations because they did not provide budget-to-actual results, did not list individual disbursements and did not account for all revenues.

DiNapoli made a number of recommendations in the audit, including:

  • Amend the company’s bylaws to clarify the cash disbursements process, and specify who should audit and approve claims prior to payment;
  • Require that all claims be properly supported by a detailed invoice, receipt or other documentation prior to payment;
  • Limit the number of signatories on the company’s checking account to reduce access to company funds;
  • Ensure that cash from vending machine sales is given to the treasurer to be recorded in the financial records and deposited into a company bank account;
  • Adopt a written fuel policy that specifies which company officials are entitled to fuel and in what quantities, and specifies controls to monitor fuel purchases;
  • Maintain complete financial records that include a running cash balance;
  • Perform bank reconciliations of all bank accounts monthly and provide these reconciliations, bank statements and canceled checks to the board for review; and
  • Ensure that the monthly reports given to the board include budget-to-actual amounts, cash receipts and disbursements, and cash balances.

For a copy of the report visit: http://www.osc.state.ny.us/localgov/audits/firedists/2014/minetto.pdf

DiNapoli encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th floor, 110 State St., Albany, NY 12236.

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