Purpose of Audit

The purpose of our audit was to determine whether Department funds were used appropriately and whether the Board provided adequate oversight of the Treasurer’s duties to safeguard Department assets for the period January 1, 2010 through April 30, 2014.

Background

The Crystal Beach Volunteer Fire Department is a not-for-profit organization located in the Town of Gorham in Ontario County. The Department is governed by a seven-member Board and its 2014 budgeted appropriations were approximately $202,000.

Key Findings

• The Treasurer and his wife misappropriated more than $95,000 of Department funds. The President signed blank checks for the Treasurer, and Board members approved payments without verifying they were for legitimate Department purposes.
• The Board failed to adopt comprehensive written guidance on credit card usage combined with the Department officials’ failure to review and approve the monthly credit card bills, left the Department’s funds subject to fraud, waste and abuse.
• The Board did not ensure that the Treasurer maintained accurate records of cash collected and deposited or review the Treasurer’s work.

• The Board did not ensure the Department’s accounting records were audited on an annual basis by a CPA, as is required by the Department bylaws.

Key Recommendations

• Seek legal advice regarding reimbursement from Department officials for the misappropriation of funds and other losses.
• Develop, adopt and implement written policies and procedures for cash management, credit cards and ethics.
• Routinely monitor and review the Treasurer’s work, by reviewing the Department’s bank statements and reconciliations, claims, canceled checks, deposit slips and financial records and reports.
• Contract annually with a CPA to audit the Treasurer’s records.