Audit Objective
Determine whether the Gates Fire District (District) Board of Fire Commissioners (Board) and officials properly planned for long-term financial and capital needs.
Key Findings
The Board and District officials did not properly plan for the District’s long-term financial and capital needs, which inhibited the Board and officials from effectively managing finances and addressing future operating and capital needs. In addition, the Board’s ability to assess the effect of current operations on long-term financial needs was hindered by inaccurate and inadequate financial records and reports and the Board’s unrealistic budgeting. As a result, the Board was not transparent with taxpayers and fund balance declined despite the Board increasing the tax levy more than $7.5 million (80 percent) for 2020 through 2024.
We also determined that:
- The District did not have a written multiyear (long-term) financial plan or an adequate capital plan.
- Officials were unable to formally evaluate the $1.9 million reserve balance as of December 31, 2023 to determine whether the funding was reasonable or would be sufficient for future needs.
Key Recommendations
- Adopt written long-term financial and capital plans to be used in conjunction with the budget process.
- Maintain reasonable, sufficient unrestricted fund balance and reserves, and adopt realistic budgets that include all anticipated revenues and planned expenditures.
District officials disagreed with certain aspects of our findings but indicated they have initiated corrective action. Appendix B includes our comments on the District’s response letter.