Purpose of Audit

The purpose of our audit was to examine the Board’s oversight of selected financial activities for the period January 1, 2012 through August 18, 2013.

Background

The Circleville Fire District is located in the Town of Wallkill in Orange County. An elected five-member Board of Fire Commissioners governs the District. The District’s general fund budget for the 2012 and 2013 fiscal years were $626,319 and $396,208, respectively.

Key Findings

• The Board’s audit of claims was not effective. Almost half of the 60 claims we reviewed, totaling $15,109, had deficiencies such as insufficient documentation.
• The District’s use of credit cards was not in accordance with Board policy.
• The Board has not adopted an online banking policy and has not entered into an agreement with the District’s bank for electronic transfers. The treasurer performed online transactions without Board oversight and bypassed established internal controls over cash disbursements.
• The treasurer failed to file the annual financial report with the Office of the State Comptroller in a timely manner.
• The District has not had an independent audit of its financial records since 2008 and has never had its length of service award (LOSAP) program audited.

Key Recommendations

• Audit all claims and ensure that each claim includes an itemized invoice with enough detail to support the claim as an actual and necessary District expense.
• Ensure that the District credit card policy is enforced.
• Adopt an online banking policy and enter into a written agreement with the District’s financial institution to establish controls over the use of online banking.
• Require that the Treasurer prepare and submit the AUD to the State Comptroller in a timely manner.
• Perform the annual audit of the Treasurer’s books and should engage an independent public accountant to audit the District’s financial and LOSAP records.