Purpose of Audit

The purpose of our audit was to review the City’s oversight of its volunteer fire companies and the City’s purchasing process for the period January 1, 2011, to August 31, 2012.

Background

The City of North Tonawanda is located in Niagara County and has approximately 32,000 residents. The City is governed by a five member Common Council. The City’s general fund budget for the 2012 fiscal year is $34.7 million.

Key Findings

• The Council did not review the fire companies’ fundraising events held in 2011 because none of the fire companies provided the City with advance notice of these events, as required by law. These events included chowder sales, food and beer tents at Canal Fest and a variety of raffles, bingo, and other games of chance. We identified fire company fundraisers that operated at a loss and provided free alcohol to participants.
• City officials did not maintain records indicating they sought written or verbal quotes, as required by the purchasing policy. We tested 24 claims totaling $41,600 from nine vendors who provided the City with materials and supplies totaling $140,703 in 2011. We found that for all 24 claims tested, department supervisors did not maintain a record of the verbal or written quotes required by the procurement.

Key Recommendations

• Ensure that the fire companies are aware of their statutory obligation to provide the Council with advance written notice of their fundraising activities. Submit to the City a financial report on the receipts and expenditures for each such activity, and provide City officials with access to the related books and records of the fire company. For fundraisers involving the sale of alcoholic beverages, confer with the City’s legal counsel as to the City’s potential liability to third parties.
• Verify that department heads obtain the required verbal or written quotes for the procurement of goods not subject to competitive bidding requirements. Maintain a record of the verbal or written quotes required by the procurement policy.