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NYS Comptroller


Audits of Local Governments and School Districts

Caton No. 1 Fire District – Financial Oversight (2013M-262)

Released: January 24, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the Districts’ financial operations for the period January 1, 2012 through July 12, 2013.


The Caton No. 1 Fire District is a district corporation of the State, distinct and separate from the Town of Caton and Steuben County in which it is located. The District is governed by an elected five-member Board of Fire Commissioners. The District’s 2013 general fund budget totaled approximately $162,000 funded primarily with real property taxes.

Key Findings

  • The Board did not establish or implement adequate internal controls to properly oversee the District’s financial operations. The District incurred operating surpluses and retained unexpended surplus funds totaling more than $270,000 or 169 percent of the budgeted appropriations for 2013.
  • The Board has not adopted an investment policy as required by law, has not developed a capital plan and has not updated the procurement policy since December 1998. District officials could not provide us with a Board-adopted code of ethics during our audit, only a code of ethics template.
  • The Board did not adequately segregate the Treasurer’s duties or implement compensating controls such as performing an annual audit of her records and reports for 2011 and 2012.
  • The Treasurer failed to prepare and submit the 2012 AUD and did not file the 2011 AUD in a timely manner.
  • Our review of all the cash disbursements paid in 2012 disclosed that 10 totaling more than $31,000 did not include sufficient supporting documentation and 12 disbursements totaling approximately $8,700 were not approved by the Board.

Key Recommendations

  • Base annual budget appropriations on reasonable assumptions using historical trends and/or actual results. Use the unexpended surplus funds in a manner that benefits District taxpayers.
  • Adopt a code of ethics and an investment policy; develop a long-term capital plan; and revise the procurement policy to meet current needs and legal requirements.
  • Develop policies and procedures over cash receipts and disbursements that adequately segregate duties and provide oversight. Ensure that the Treasurer annually submits all financial records and reports to the Board for audit.
  • Ensure that the Treasurer prepares and files the AUD in a timely manner.
  • Ensure that all District claims are audited.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email:
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236