Audit Objective
Did Cincinnatus Fire Department (Department) treasurers and membership ensure that financial activities were properly recorded and supported and that money was safeguarded?
Audit Period
January 1, 2023 – October 31, 2024
Understanding the Audit Area
Ensuring that financial activities are properly recorded, supported with documentation and safeguarded is essential for bills to be paid on time and making funds available for equipment, training and emergency responses. A lack of oversight can lead to a lack of operational effectiveness, mismanagement, fraud, damaged reputation and jeopardize the Department’s funding and its mission.
Department treasurers and membership are responsible for providing proper oversight of the Department’s financial operations. The Department has five treasurers, one for the Department and one for each of its four subdivisions, that are responsible for receiving, and after approval by the membership, disbursing Department funds. The Department’s treasurers collected $270,147 and disbursed $317,776 from 13 bank accounts during the audit period, including nine checking accounts and four savings accounts.
Audit Summary
The Department’s five treasurers and the Department membership did not ensure the Department’s financial activities were properly recorded and supported with documentation and that money was safeguarded. Because the Department has four subdivisions, each with its own treasurer, there is an increased risk of Department funds being lost or misused.
Department treasurers did not ensure that accurate and complete accounting records and reports were maintained and submitted to the membership. Bank statements indicated that $270,147 was deposited into nine bank accounts, maintained as “Department bank accounts,” during the audit period. However, the treasurers’ collective records indicated that only $229,178 was deposited. Similarly, while the bank statements indicated that $317,776 was disbursed during the audit period, the treasurers’ collective records indicated that $133,050 was disbursed from the bank accounts. Additionally, the treasurers did not maintain accounting records for six bank accounts, including four savings accounts and two checking accounts, that had activity. One additional checking account had an accounting ledger with deposits recorded, but no disbursements were recorded in the ledger.
Furthermore, Department treasurers did not always ensure that disbursements were properly supported with documentation, and the membership did not ensure all disbursements were approved before payments were made. We determined that 280 disbursements totaling $87,245 lacked an invoice or other supporting documentation, and 135 of the disbursements totaling $40,728 also were not approved by the Department membership. In addition, the Department had three debit cards used for purchases by the treasurers of two subdivisions and the captain of the emergency squad.
Department treasurers also did not maintain supporting documentation for collections or deposit funds in a timely manner. We determined that 158 collections totaling $66,856 were not properly supported with documentation, a majority of which were deposited into five checking accounts. Additionally, 131 collections totaling $91,884 were not deposited in a timely manner and 104 collections totaling $76,916 did not have supporting documentation indicating the collection date to determine the timeliness of the deposit.
The lack of oversight of financial activities increases the risk of theft, potential liability and waste of Department resources.
The report includes 15 recommendations that, if implemented, will improve the Department’s financial management. The Department membership generally agreed with our recommendations and indicated they plan to initiate corrective action. The Department membership’s response is included in Appendix B.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC) 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 Department membership has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of GML. 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. The CAP should be posted on the Department’s website for public review.