Audit Objective
Did the Caledonia Fire Department (Department) Board of Directors (Board) provide adequate oversight of financial operations?
Audit Period
January 1, 2023 – January 8, 2025
Understanding the Program
The Board must provide oversight to ensure financial operations are properly managed. This includes ensuring comprehensive records are maintained, duties are appropriately segregated or compensating controls are implemented to safeguard funds, and reviewing records and reports to detect discrepancies.
The Department is composed of volunteer members and is governed by its bylaws and seven-member Board. The Board is responsible for managing the Department’s financial activities.
The Treasurer is responsible for maintaining custody of, disbursing, depositing and accounting for the Department’s financial activities and preparing financial reports. The booking coordinator oversees hall rentals and certain fundraising events.
The Department’s disbursements totaled $174,302 from January 1, 2023 through May 31, 2024.
Audit Summary
The Board did not provide adequate oversight of financial operations. In addition, our previous audit report, Caledonia Fire Department – Internal Controls Over Financial Operations (2013M-356), released March 2014 had similar findings and recommendations concerning the Board’s lack of oversight. Because the Board did not implement adequate corrective action to address these findings, the same deficiencies exist.
The Board did not:
- Ensure that the financial review committee conducted an annual review of the Treasurer’s financial records or that all 325 claims paid between January 1, 2023 and May 31, 2024 totaling $174,302 were reviewed, approved and properly supported. The Board also did not ensure that the Treasurer:
- Maintained accurate and complete financial records,
- Provided the Board with adequate financial reports, bank statements, canceled check images and bank reconciliations to monitor operations.
- Ensure that officials safeguarded and properly supported hall rental and fundraising revenues. From January 1, 2023 through May 31, 2024 deposits, including those for hall rentals and fundraising, totaled $211,917.
- Adopt:
- Written financial policies to establish a system of internal controls that ensure oversight of financial activities, transactions are authorized and properly reviewed and Department resources are adequately safeguarded,
- The required code of ethics policy to establish reasonably expected standards of conduct, or
- A conflict-of-interest policy that requires officials to disclose any interests that conflict with official duties.
The lack of oversight of financial operations increases the risk of theft, potential liability and waste of Department resources.
The report includes 11 recommendations that, if implemented, will improve the Board’s oversight of financial operations.
Department officials agreed with our recommendations and indicated they have initiated corrective action. Appendix C includes our comment on the Department’s response letter.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law. Our methodology and standards are included in Appendix D.
The Board has the responsibility to initiate corrective action. We encourage the Board to prepare a written corrective action plan (CAP) that addresses the recommendations in this report and forward it to our office within 90 days. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review.