Audit Objective
Did the Ouaquaga Fire Company, Inc. (Company) Board of Directors (Board) and membership operate the Company in accordance with its Certificate of Incorporation (Certificate) and provide adequate financial oversight of Company operations?
Audit Period
January 1, 2022 – February 28, 2025
Understanding the Audit Area
Operating a fire company in accordance with its Certificate and providing adequate financial oversight is critical for ensuring public trust and legal compliance. According to the Certificate, the Company’s general purpose is to acquire and own fire apparatus and emergency equipment for use by the Company in the protection of individuals and property from injury, loss, damage or destruction by fire or other emergencies. The Certificate was amended in March 2023 to state that the Company was to have no less than three Directors and that some or all of the duties, responsibilities and obligations of the management of the Company could be vested in its membership.
The Company’s current revenue sources are Foreign Fire Insurance (FFI) tax proceeds, yearly rental income of $13,000 for use of its facilities from the Colesville-Windsor Fire District (District) and periodic private donations.
Audit Summary
Due to a lack of Directors,1 the Board could not operate the Company in accordance with its Certificate. As a result, we question whether the Company is currently fulfilling its corporate purpose in accordance with its Certificate. Due to a lack of members actively participating in the Company, the Treasurer initiated and oversaw all financial operations of the Company without any oversight. Given this lack of oversight, the Treasurer also paid claims before approval by the Board or membership, did not maintain accurate and complete accounting records, and did not submit required reports to the New York State Office of the State Comptroller (OSC). As a result, the risk of theft and waste of Company resources significantly increased.
The Treasurer paid all 172 claims totaling $185,900 before approval from the Board or the Company’s membership. In addition, 40 claims, totaling $43,100, did not have adequate supporting documentation such as an itemized invoice or receipt to verify that each disbursement was for a proper Company purpose. We also identified one claim, totaling $11,800, which was paid twice for the same piece of equipment without a refund issued to the Company.
Furthermore, the Treasurer’s cash balances in the accounting records were not accurate or complete, varying from our recalculated balance by $15,000 as of February 28, 2025. The Treasurer also did not file the required annual report with OSC on the receipt and use of FFI tax proceeds for the 2023 or 2024 fiscal years. Lastly, the Treasurer did not maintain documentation to verify that the expenditure of FFI tax proceeds was approved by the membership.
The report includes 11 recommendations that, if implemented, will improve the Company’s operations. Company officials generally agreed with our recommendations and their response is included in Appendix B.
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 (GML). Our methodology and standards are included in Appendix C.
The Board and membership have the responsibility to initiate corrective action. We encourage the Board and membership 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 and membership to make the CAP available for public review.
1 By the end of the audit period, the membership of the entire Company was composed of a total of three individuals (i.e., the Director/Treasurer, Director/Secretary and one volunteer firefighter). Through the remainder of this report, we refer to the Director/Treasurer as the Treasurer and the Director/Secretary as the Secretary.