Orange Lake Fire District – Budgeting Practices (2015M-146)

Issued Date
September 25, 2015

Purpose of Audit

The purpose of our audit was to examine the District’s budget process for the period January 1, 2014 through April 30, 2015.

Background

The Orange Lake Fire District is located in the Town of Newburgh, Orange County. The District, which serves approximately 10,650 residents, is governed by an elected five-member Board of Commissioners. The budget for 2015 totals approximately $1.45 million.

Key Findings

  • The Board did not adopt any written policies or procedures for preparing the annual budget.
  • Budgets did not contain sufficient data comparing the previous year’s completed financial activity with the current year’s modified budget and the upcoming year’s preliminary budget.
  • Budgets included appropriations for funding District reserves and the Board applied operating surplus funds to its reserves, which was not included in the budget.

Key Recommendations

  • Develop policies and procedures over the budgeting process so that proposed budgets are in the required format and contain sufficient and complete information.
  • Base budget estimates on reasonable assumptions using historical trends, actual expenditures or both.
  • Evaluate the amounts budgeted for reserve accounts for reasonableness and accumulate only those funds necessary to fund planned purchases.