1. Home
  2. Local Government
  3. Audits of Local Governments
  4. Warsaw Fire Department – Internal Controls Over Financial Operations (2013M-347)

Warsaw Fire Department – Internal Controls Over Financial Operations (2013M-347)

Issued Date
January 31, 2014
read complete report91.2 KB

Purpose of Audit

The purpose of our audit was to determine whether Company controls are adequate to ensure that financial activity is properly recorded and reported and that Company moneys are safeguarded for the period June 1, 2011 through October 21, 2013.

Background

The Warsaw Fire Department comprises one fire company, Cry-Res Corporation (Company). The Company provides services for the Village of Warsaw in Wyoming County and fire protection services to residents outside the Village pursuant to contracts with the Towns of Orangeville, Warsaw and Middlebury. The Company is operated in accordance with its by-laws which stipulate that an elected Board of Directors, also known as the Fire Council (Board) and comprising 12 elected members. During the 2012-13 fiscal year, Company officials deposited approximately $128,000 into Company bank accounts. The Company’s disbursements during the 2012-13 fiscal year totaled approximately $117,000.

Key Findings

  • Although the Treasurer generally maintained appropriate financial records, the Board does not provide adequate oversight of Company financial activities because the Treasurer does not provide the Board with monthly or annual reports.
  • The Treasurer does not prepare a monthly bank reconciliation to be presented to the Board.
  • The Board did not elect two members to audit the Treasurer’s records as required by the by-laws and did not audit bills or approve payments prior to checks being issued.
  • Not all Company funds were accounted for or in the custody of the Treasurer as required by the by-laws; instead, the Grounds Superintendent collected fees and made disbursements related to the rental and maintenance of a Company facility.

Key Recommendations

  • Provide oversight of the Treasurer’s responsibilities to ensure they are fulfilled, including the preparation of comprehensive monthly and annual reports to assist the Board in monitoring financial activity.
  • Prepare monthly bank reconciliations and present them to the Board for review.
  • Elect two members to audit the Treasurer’s financial records as authorized in the by-laws. Approve bills prior to payment and ensure that appropriate supporting documentation is included.
  • Collect, record and disburse all Company moneys, including grounds rental fees, as required by the by-laws.