[read complete report - pdf]

Audit Objective

Determine whether the South Butler Fire District (District) Board of Fire Commissioners (Board) provided adequate oversight of the District’s financial operations.

Key Findings

The Board did not provide adequate oversight of the District’s financial operations and did not adopt or enforce key financial policies. As a result:

• The Treasurer lacked guidance to adequately perform financial duties and thus: did not maintain sufficient banking or purchasing records, funded and disbursed money from reserves without authorization and paid unapproved claims.
• Officials could not demonstrate the District obtained the best available prices on purchases we reviewed.
• The Board adopted inaccurate and structurally imbalanced budgets and did not properly establish, fund or use reserve funds.
• Fund balances and real property tax levies were higher than needed to fund operations.

Key Recommendations

• Adopt adequate financial policies and procedures to define, segregate and oversee financial duties.
• Develop appropriate and structurally balanced budgets.
• Audit and approve all claims prior to payment.

District officials disagreed with some of our findings, but indicated they will take corrective action. Appendix B includes our comments on issues raised in the District’s response.