Audit Objective
Did the Crystal Beach Volunteer Fire Department (Department) Treasurer (Treasurer) provide adequate oversight of Foreign Fire Insurance (FFI) tax proceeds?
Audit Period
January 1, 2024 – February 6, 2026
Understanding the Audit Area
A fire department should provide adequate oversight of FFI tax proceeds to ensure the funds are used legally and for the benefit of the fire department, as determined by its members. Proper oversight helps maintain transparency and accountability in the distribution and use of these funds. A lack of adequate oversight increases the risk of theft, misuse and mismanagement of fire department FFI tax proceeds. A fire department’s treasurer is generally responsible for providing oversight of FFI tax proceeds.
The Department received a total of $7,978 in FFI tax proceeds in fiscal years 2024 and 2025.
Audit Summary
The Treasurer did not provide adequate oversight of FFI tax proceeds. The Treasurer did not maintain separate, complete and accurate records of FFI tax proceeds received and expended, establish a formal process for approving expenditures prior to payment or file the required annual FFI tax proceeds report with our office. In addition, the Department’s bylaws (bylaws) lacked clear guidance for the receipt, recording, use and reporting of FFI tax proceeds. Without adequate oversight and controls, there is an increased risk of theft, misuse and mismanagement of the Department’s funds.
For example, the Treasurer provided a list of 12 expenditures totaling $9,698 that she believed were paid using FFI tax proceeds. These expenditures exceeded the amount of FFI tax proceeds received by the Department during fiscal years 2024 and 2025, and we determined that two expenditures totaling $2,309 (24 percent) were improperly paid with FFI tax proceeds. These improper expenditures included gifts for non-members totaling $1,296 and gift cards totaling $1,013.
The report includes six recommendations that, if implemented, will strengthen oversight, improve accountability and help ensure FFI tax proceeds are used only for appropriate Department purposes. Department officials agreed with our recommendations and indicated they will take corrective action.
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 (NYS) General Municipal Law (GML). Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. The Board is encouraged to prepare a written corrective action plan (CAP) that addresses the recommendations in this report and forward it to OSC within 90 days. For more information on preparing and filing the CAP, please refer to the OSC brochure, Responding to an OSC Audit Report, which was provided with the draft audit report. The Board is encouraged to make the CAP available for public review.