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July 21, 2009

 

DiNapoli: Poor Oversight and Bookkeeping Put Pocatello First District Tax Dollars at Risk

Lax oversight by the Pocatello Fire District allowed the district’s treasurer to spend more than $16,000 without authorization by the board, according to an audit released by State Comptroller Thomas P. DiNapoli. Additionally, the treasurer left $72,000 in certificates of deposit and 12 signed blank checks unsecured. Moreover, since the treasurer was never sworn into office, she was not authorized to perform her duties. The district is located in Orange County.

“Volunteer fire fighters sacrifice personal and family time to serve and protect,” said DiNapoli. “Their sacrifice should not be tainted by fire officials who fail to keep a close eye on the tax dollars they need to run their operations. Right now, every dime counts, especially when those dimes are used to protect the safety and well being of New York families.”

DiNapoli’s auditors identified the following problems:

  • the treasurer did not maintain proper accounting records and post cash transactions and as a result, the district spent $485,467 without posting any cash transactions or preparing any periodic and annual reports. This failure could result in theft of district money;
  • two certificates of deposits totaling $72,000 and 12 signed blank checks were left in the district office unsecured;
  • the district did not file Federal tax information forms for the 2007 and 2008 fiscal years for the $8,100 the district paid to the treasurer, making the district vulnerable to tax penalties;
  • two commissioners, without authorization, signed 14 checks totaling $10,919. Although all checks appeared to be for valid district purposes, the absence of authorized signatories increases the risk that funds could be misappropriated; and
  • the treasurer did not take her official oath of office in a timely manner, and did not file an official undertaking, as required by state Town Law. As a result, the district could not make a claim against the undertaking when the treasurer did not faithfully perform her duties. Collection from such a claim would have provided the district with funds to hire an accountant to keep the district’s books when the treasurer left.

DiNapoli recommended that the Pocatello fire board:

  • implement written procedures on purchasing and investment;
  • develop and formally adopt a code of ethics;
  • ensure the secretary attends all board meetings, takes a complete and accurate record of the proceedings, minutes, resolutions and other district records;
  • audit and approve all payment claims prior to payment;
  • fill the treasurer vacancy with an individual who resides in the district and can fulfill the treasurer’s duties, ensuring that the treasurer files an official undertaking with adequate coverage with the Wallkill town clerk;
  • fill the secretary vacancy with a competent individual, and ensure that all required district filings, such as oaths of office, are made in a timely manner;
  • properly account for all cash transactions and require the treasurer to reconcile bank accounts;
  • ensure the treasurer does not sign blank checks;
  • ensure the treasurer prepares and submits annual reports on the district’s finances to OSC, the town clerk and to the Board in a timely manner; and
  • establish policies and procedures to restrict access to district resources and information to help reduce the risk of unauthorized use, loss or damage.

Pocatello officials generally agreed with DiNapoli’s findings and indicated they would take corrective action.

Click here to view the audit.


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