Audit Objective

Determine whether the Hamlin Morton Walker Fire District (District) Board of Fire Commissioners (Board) and officials effectively managed fund balance.

Key Findings

The Board and officials did not effectively manage fund balance. As a result, they were not transparent with taxpayers and fund balance declined. We found:

• From 2020 through 2022, restricted fund balance declined by $676,641 (66 percent). As of December 31, 2022, unrestricted fund balance was $34,092, which was less than 4 percent of the 2023 appropriations.
• The Board did not adopt realistic budgets. For example, expenditures were underestimated by nearly $1.5 million (45 percent) and revenues were underestimated by $215,772 (8 percent) for 2020 through 2022.
• The District did not have a written multiyear financial plan or adequate capital plan, which inhibits the Board and District officials from effectively managing finances and addressing future operating and capital needs.

Key Recommendations

• Maintain reasonable, sufficient unrestricted fund balance and reserves.
• Adopt realistic budgets that include all anticipated revenues and planned expenditures.
• Amend the written fund balance policy and adopt comprehensive written financial and capital plans.

District officials generally agreed with our findings and indicated they will initiate corrective action.