Audit Objective
Did the North Creek Fire District (District) Board of Fire Commissioners (Board) provide adequate oversight of District financial activities?
Audit Period
January 1, 2022 – March 31, 2025
Understanding the Audit
The elected five-member Board governs the District and must provide adequate oversight of the District’s financial activities to ensure public funds are used effectively, maintain fiscal stability and prevent waste, fraud and mismanagement. Board members must comply with Town Law Section 176-e that mandates fiscal oversight training and are responsible for safeguarding the District’s money and ensuring it is spent prudently to provide necessary fire and emergency services.
The District’s budgeted appropriations for 2025 totaled $215,481 and the District’s reserve fund balance totaled $59,113 as of December 31, 2024.
Audit Summary
The Board did not provide adequate oversight of District financial activities related to budgeting, monthly financial reporting, bank reconciliations, annual financial reporting, annual audits and policy reviews. As a result, the Board had limited assurance that the information used to make financial decisions was accurate and complete and provided less assurance to taxpayers and other interested parties that the District’s financial activities were adequately accounted for and accurately reported. The Board did not:
- Develop and adopt realistic budgets taking into consideration multiyear financial planning. For example, during the audit period the Board adopted budgets with appropriations that overestimated actual expenditures by an average of $28,284 (16 percent). Overestimated expenditures combined with reasonable revenue estimates generally increased the District’s fund balance during the audit period.
- Ensure that the Treasurer provided sufficient financial reports to effectively monitor financial activities throughout the year or review bank reconciliations and bank account statements. We prepared bank reconciliations for the audit period, compared adjusted bank balances to the accounting records and identified variances that remained unaddressed since June 2023. This included three checks totaling approximately $935 that were entered in the accounting records twice, resulting in the accounting record cash balance appearing less than the reconciled bank balance.
- Conduct an annual audit to provide oversight and ensure accuracy of records and reports or ensure the Treasurer filed required annual reports.
- Periodically review required policies including the District’s code of ethics, purchasing and investment policies.
The lack of oversight resulted in variances that were not identified or corrected during the audit period. For example, the Treasurer underreported December 31, 2024 cash balances by $76,644 in the Annual Financial Report (AFR) because he used unreconciled cash balances and did not include reserved amounts. Had the Board requested the Treasurer’s records and compared them to supporting documentation (e.g., bank statements and reconciliations) and reports prepared by the Treasurer, it could have identified the variances in the accounting records and reported cash balances.
The report includes 12 recommendations that, if implemented, will improve the Board’s oversight of District financial activities. Except as specified in Appendix B, District officials generally agreed with our recommendations and indicated they planned to take corrective action. Appendix C includes our comment on an issue raised in the District’s response letter.
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 (GML). 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.