Audit Objective
Did the Fort Johnson Volunteer Fire Company, Inc. (Company) Board of Directors (Board) provide adequate oversight of financial operations?
Audit Period
March 1, 2024 – August 31, 2025.
We extended the audit period back to January 1, 2022, to review the Company’s Crisis Advance (loan) program.
Understanding the Audit Area
The Board, responsible for the general management and control of the Company’s financial operations, must provide adequate oversight of the Company’s financial operations to ensure public funds are managed with accountability, transparency and integrity. This critical function can help maintain public trust, prevent mismanagement, waste, fraud and legal non-compliance.
For the period March 1, 2024, through August 31, 2025, the Company’s deposits totaled $522,784 and disbursements totaled $434,512.
Audit Summary
The Board did not provide adequate oversight of financial operations. It did not adopt comprehensive bylaws and written financial policies and procedures to help ensure financial transactions were properly authorized, recorded and reported. In addition, the Board did not review and approve disbursements before payment, implement an effective claims auditing process, regularly review financial reports or provide guidance to the Treasurer on maintaining accounting records. The Board also did not maintain Board meeting minutes, file required foreign fire insurance (FFI) tax proceeds reports with our office or monitor the Company’s loan program. As a result, the Board lacked assurance that financial activities were properly managed and that Company assets were adequately safeguarded. These weaknesses increased the risk that errors, irregularities, unauthorized transactions and waste or misuse of Company resources could occur and remain undetected.
For example:
- We tested 71 disbursements totaling $315,682 and determined that they were not always properly supported, recorded accurately, or reviewed and approved before payment. Additionally, because supporting documentation was not available, we could not determine whether 186 credit card charges totaling $19,470 were for proper Company purposes.
- The Board did not ensure the loan program was administered in accordance with Company bylaws or Not-for-Profit Corporate Law (NPCL) Section 716. As a result, the Treasurer issued four loans totaling $5,773 to two Company officers in violation of NPCL. In addition, the Board wrote-off outstanding loan balances totaling $20,736 after determining the borrowers were unable to repay their loans, resulting in a loss of Company resources.
The report includes eight recommendations that, if implemented, will strengthen the Board’s oversight of financial operations, improve accountability and transparency, and better safeguard Company resources from errors, misuse and unauthorized activity. Company officials generally agreed with our findings and indicated they plan to initiate corrective action. Appendix C includes our comments on certain issues Company officials raised in their response.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and New York State Office of the 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 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.