Audit Objective
Did the Lockwood Volunteer Fire Department (Department) officials ensure that financial activity was properly supported, authorized, recorded and reported?
Audit Period
April 1, 2024 – April 30, 2025. We extended the audit period back through March 30, 2024, to determine whether contractual fire protection collections were recorded in the accounting records.
Understanding the Audit Area
A fire department (department) treasurer should record and report financial transactions in a complete, accurate and timely manner to enable the department board of directors (board) and department membership to make informed decisions, prevent fraud or misappropriation of funds, comply with reporting requirements and maintain the public’s trust. Accurate and timely records are essential for establishing financial accountability and proper financial management, enabling effective oversight by the board, department membership and taxpayers and protecting public funds. The board also must ensure that disbursements are adequately supported, for appropriate fire department purposes and authorized before payment.
Department disbursements totaled $96,765 and fundraising and other collections totaled $110,266 during the audit period.
Audit Summary
Department officials did not ensure that financial activities were properly supported, authorized, recorded and reported or provide the Department Board of Directors (Board) with complete, accurate and timely information needed to effectively oversee the Department’s financial operations. As a result, the Board did not have reliable information on which to base financial decisions, and the Department had an increased risk that its resources could be wasted, misused or stolen. Although the financial activities that we reviewed were generally recorded in the accounting records, Department officials and the Department Membership (Membership) did not:
- Ensure that the Department Treasurer (Treasurer):
- Maintained complete financial records and reports that supported collections and disbursements,
- Provided accurate monthly financial reports to the Board and Membership that included monthly bank statements, bank reconciliations, canceled check images, support for the collections deposited and budget-to-actual variance reports.
- Ensure that the meeting minutes for the monthly Board and Membership meetings contained adequate details and documentation, such as the annual report presented to the Membership.
- Update the Department’s bylaws or develop and enforce financial procedures.
In addition, officials did not maintain any documentation indicating that the Board conducted periodic financial audits of the Department’s accounting records or reported annually to the Membership. Furthermore, the Board and Membership did not ensure that the Treasurer filed the annual report for the Department’s 2024, foreign fire insurance (FFI) tax proceeds with the New York State Office of the State Comptroller (OSC) and the 2024 annual Form 990 with the U.S. Internal Revenue Service (IRS).1
Because the Treasurer did not perform monthly bank reconciliations, and no one reviewed bank statements and canceled check images, the Department had an increased risk that its resources could be wasted and stolen.
The report includes 11 recommendations that, if implemented, will strengthen Department officials’ oversight of financial activities, improve the accuracy, completeness and reliability of the Department’s financial records and reports, enhance accountability and help safeguard Department resources. District officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.
This audit was conducted pursuant to Article V, Section 1 of the State Constitution and 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 and Membership have 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.
1 The IRS uses Form 990 to obtain information about tax-exempt organizations, educate organizations about tax law requirements and promote compliance with the requirements. Organizations also use the form to share information with the public about their programs.