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July 29, 2007

 

Significant Accounting Deficiencies Found at
Bedford Hills Fire District

Fire District Fails to Audit Finances and Monitor Treasurer’s Activities
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Bedford Hills Fire District failed to regularly monitor its financial activity, including filing state-mandated financial report for eight years, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“When local governments don’t monitor their finances, taxpayer money is at risk,” DiNapoli said. “Bedford Hills is fortunate; no one took advantage of its lax accounting practices. Other local governments may not be so lucky in the future. Rigorous and thorough financial oversight must become a priority.”

Auditors discovered the board of commissioners neglected to audit its finances, as required by town law, and failed to adequately monitor the treasurer’s activities. The treasurer is responsible for receiving, depositing and disbursing the district’s funds and maintaining financial records.

DiNapoli said that when one person is responsible for completing every step in a transaction process, the board must establish strong oversight procedures to review these transactions to ensure there is no misuse of district funds. Additional controls could include the board reviewing bank statements each month or regularly reviewing accounting records.

Auditors also found significant deficiencies in the district’s record keeping that prevented the board from regularly reviewing the district’s finances. Because there were no written procedures, the treasurer failed to prepare monthly or yearly financial reports for the board; maintain revenue and expense records; and reconcile cash book balances with bank balances.

In addition, the treasurer failed to file necessary annual fiscal reports with local, state and federal authorities including:

  • 1099 forms with the Internal Revenue Service for two cash disbursements totaling $20,192
  • certified annual financial reports with State Comptroller for the past eight years and
  • annual financial statements with the town clerk.

The district, located in Westchester County, was also owed $4,700 in back rent and $7,000 in late rental payment fees, which the treasurer did not collect from tenants on property the district owns. The treasurer did not initiate rent increases each year as the lease agreement stipulated or collect a full month’s rent in September 2006.

Auditors recommend that the board provide adequate oversight and implement controls over the treasurer’s duties. In addition, auditors recommend that the treasurer:

  • maintain accurate, complete and up-to-date accounting records,
  • regularly reconcile cash book balances with bank balances,
  • prepare monthly and yearly financial reports, and
  • prepare and file mandated annual financial statements with the State Comptroller and town clerk.

The district generally agreed with the findings and recommendations of the audit and has agreed to pursue corrective action. The district’s response is included in the audit.

Click here to view the audit.

Local Government and School Accountability
The State Comptroller’s office is responsible for monitoring the fiscal affairs of local governments and school districts statewide. To help local government and school officials successfully fulfill their public duties, each year the State Comptroller’s office offers numerous training sessions on accounting procedures and governmental accounting as well as customized training and workshops on a variety of other topics. In 2006, more than 12,900 local government and school officials attended 95 training sessions across the state.

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