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Ellenburg Center No. 15 Fire District – Internal Controls Over Financial Operations (2013M-103)

Issued Date
July 19, 2013
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Purpose of Audit

The purpose of our audit was to evaluate the District’s controls over financial operations for the period January 1, 2011, to February 28, 2013.

Background

The District is a district corporation of the State, distinct and separate from the Town of Ellenburg, located in Clinton County. The Board of Fire Commissioners consists of five elected members. The District’s general fund budget was $78,540 for the 2012 fiscal year.

Key Findings

The Board should improve its oversight of the District’s financial activities.

  • The Board has not adopted a code of ethics or procurement and investment policies as required by General Municipal Law (GML). As a result, the Board has not set appropriate expectations for District operations. For example, the Treasurer was unaware of where she is authorized to deposit District funds due to the lack of an investment policy.
  • The District has deposits and short-term investments in a credit union which is not a financial institution authorized by GML. As of December 31, 2012, the District had $585,045 (or 99 percent of the District’s total cash on hand) in cash deposits and certificates of deposits at the credit union.
  • The former Treasurer did not complete monthly bank reconciliations during the period January 1, 2011, through June 30, 2012, and the 2011 annual financial report filed with OSC was not accurate. The current Treasurer has completed monthly bank reconciliations beginning in August 2012 and is providing the Board with monthly account balances of the District’s cash deposits and temporary investments.
  • Prior to the current Treasurer taking office, the Board did not perform a thorough and timely audit of claims prior to payment.

Key Recommendations

  • Establish financial policies and procedures as required by GML.
  • Deposit the District funds in a financial institution authorized by GML.
  • Continue preparing monthly bank reconciliations and providing monthly financial reports to the Board.
  • Continue to conduct a proper audit of claims prior to disbursement by the Treasurer.