Audit Objective
Did the Board of Fire Commissioners (Board) of the Mattituck Fire District (District) effectively audit claims before payment?
Audit Period
January 1, 2023 – June 30, 2024
Understanding the Audit Area
An effective audit of claims is often the last line of defense for preventing unauthorized, improper or fraudulent claims from being paid. A proper claims audit ensures that all claims are subjected to an independent, thorough and deliberate review which determines, among other things, that each purchase is for a proper fire district purpose and is adequately supported and approved. Generally, the Board must audit and approve all claims against the District before directing the Treasurer to pay them.
The District’s expenditures for 2023 were approximately $1.6 million and 2024 budgeted appropriations were nearly $3 million, which were funded primarily by real property taxes. During the audit period, the District issued 890 nonpayroll disbursements totaling $1.5 million.
Audit Summary
The Board did not ensure that all nonpayroll disbursements were appropriate, adequately supported, audited and approved before claims were paid. When the Board does not perform a thorough and complete review of claims to ensure they are supported by adequate invoices or other documentation, the District has an increased risk that it could incur unnecessary costs or pay for goods or services that were not received or that were not valid District expenditures.
We determined that the Board did not always perform a thorough and deliberate audit of claims before approving payments, and the Treasurer paid claims that were never audited by the Board. We reviewed 135 claims totaling $194,4781 and determined that the Board should not have approved 90 claims (67 percent) totaling $125,562. The Board did not:
- Ensure that all claims were adequately supported and excluded sales tax and late fees before approving them for payment. Specifically, the Board should not have approved 90 claims (67 percent) totaling $125,562 because the claims did not contain sufficient documentation to allow for a proper audit or the claim contained one or more discrepancies.
- Audit and approve all claims before the Treasurer issued the payments. Specifically, nine claims totaling $23,651 were paid by the Treasurer but were never authorized to be paid through an approved warrant or Board resolution. Also, the Treasurer paid two claims totaling $2,149 five and eight days before the Board audited and approved them.
Because the Board approved claims that did not have adequate supporting documentation, the District incurred $331 of unnecessary sales tax and may have paid for goods and services that were not received or were not for proper District purposes.
The report includes 10 recommendations that, if implemented, will improve the Board’s claims audit process. District officials disagreed with certain aspects of our findings but indicated that they plan to initiate corrective action. Appendix C includes our comments on issues raised in the District’s response letter.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC) 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.
1 Refer to Appendix D for further information on our sample selection.