Audit Objective
Did North Brookfield Volunteer Fire Department (Department) officials establish written policies and procedures for investing Department funds?
Audit Period
January 1, 2024 – March 24, 2026
We extended the audit period back to July 1, 2008 to review the Department’s investment records.
Understanding the Audit Area
Fire department officials should establish written investment policies and procedures to ensure department funds are invested safely and prudently and are readily available to meet operational needs. Effective cash management and investment policies and procedures help promote accountability, transparency and sound stewardship of department resources.
As of December 31, 2025, the Department had approximately $58,000 in cash and cash equivalents, of which approximately $39,000 was invested in certificates of deposits that are Federal Deposit Insurance Corporation insured.
Audit Summary
Department officials did not adopt a written investment policy or establish procedures to govern the investment of Department funds or provide a framework to help ensure funds were invested safely and prudently and that the Department’s resources were not exposed to unnecessary financial risk.
During the audit period, the Department invested $77,200 with a local tax preparer/insurance agent who issued promissory notes that promised an 8 percent annual return. Without written investment policies and procedures, officials lacked formal guidance for evaluating investment risks and determining whether the investment was appropriate for the Department. The individual whom the Department invested their funds with subsequently filed for bankruptcy in April 2023 and was convicted of operating a Ponzi scheme involving more than $50 million. Although the Department recovered $6,442 through the bankruptcy proceedings, it lost $45,758 of its principal investment and never received a return on the investment.
This report includes two recommendations that, if implemented, will strengthen the Department’s investment practices and help safeguard its financial resources. Department officials agreed with our recommendations and indicated they will take corrective action.
This audit was conducted pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC’s) authority as set forth in Article 3 of the New York State General Municipal Law (GML). The audit’s 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.