Audit Objective
Did the Montrose Fire District (District) Board of Commissioners (Board) properly audit claims?
Audit Period
January 1, 2023 – August 31, 2024
Understanding the Audit Area
The claims audit is often the last line of defense for preventing unauthorized, improper or fraudulent claims from being paid. A fire district board must audit the claims against a fire district before they are paid. A proper claims audit ensures all claims are subjected to an independent, thorough and deliberate review that, among other things, determines that the fire district complied with its written policies, and that each purchase was for a proper fire district purpose. Purchases made using credit cards are also subject to claims audit and approval.
The District’s 2024 budgeted appropriations totaled $932,853 and, during the audit period, the District processed 828 claims totaling $1,143,725. These claims included purchases totaling $32,896 made with District credit cards.
Audit Summary
We reviewed 166 claims totaling $712,696 and determined that the Board did not properly audit 78 claims (47 percent) totaling $47,836. Specifically, the Board approved:
- 21 claims totaling $23,789 without documentation indicating that the services outlined in the rental agreement were rendered.
- A claim totaling $17,812 for an automatic defibrillator (AED) without obtaining quotes in accordance with the District’s purchasing policy or providing sufficient proof that it was a sole source purchase.
- 13 claims that included sales tax totaling $228.District officials told us they were aware that sales taxes were paid on certain purchases and have taken measures to ensure sales taxes are not paid going forward.
- 42 out of 60 credit card claims (70 percent) totaling $5,117 without adequate supporting documentation that purchases were for legitimate District purposes. These claims included purchases totaling $484 made through an online payment system and at a local coffee chain. Although officials claimed that the purchases were fraudulent, they did not provide documentation to support that fraud claims were filed with the bank to dispute the charges.
- A credit card claim that included a $288 purchase from an online data backup services vendor that may have been a duplicate.
By not properly auditing claims, the Board’s ability to effectively monitor District financial operations is diminished and errors and irregularities may continue to occur and remain undetected and uncorrected.
The report includes five recommendations that, if implemented, will improve the District’s claims auditing practices. District officials disagreed with certain aspects of our findings. Appendix C includes our comments on issues raised in the District’s response.
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 General Municipal Law. Our methodology and standards are included in Appendix D.
The Board has the responsibility to initiate corrective action. Pursuant to Section 181-b of New York State Town Law (Town Law), a written corrective action plan (CAP) that addresses the findings and recommendations in this report must be prepared and forwarded to our office within 90 days. To the extent practicable, implementation of the CAP must begin by the end of the next fiscal year. 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.