Audit Objective
Did Beekmantown Fire District No. 1 (District) officials develop and manage a comprehensive investment program?
Audit Period
January 1, 2023 – January 31, 2025
Understanding the Audit Area
A comprehensive investment program helps ensure that officials operate within the statutory framework established for fire districts and can create a clear structure for managing investments and improving oversight and accountability. A comprehensive investment program includes a written investment policy that can provide officials with a tool to manage finances more effectively and help ensure that funds are not only safe but also available when needed.
This structured approach can help officials optimize how funds are managed, leading to better financial health and potentially more resources for fire services. For example, when officials actively solicit interest rate quotes and consider various investment options, in place of basic savings or checking accounts, they may earn more investment earnings on available surplus funds, which ultimately can benefit taxpayers.
During the audit period, the District had funds on deposit at one financial institution in a noninterest-bearing checking account and a savings account and had an average of approximately $530,000 in available funds to invest each month. The elected five-member Board of Fire Commissioners (Board) governs the District and is responsible for its overall financial management, including adopting an investment policy.
Audit Summary
We determined that the District’s investments were legal, safe and liquid. However, officials did not develop and manage a comprehensive investment program. For example, officials did not prepare monthly cash flow forecasts to estimate funds available for investment or solicit interest rate quotes from financial institutions. As a result, officials did not determine the potential funds available for investment each month or ensure that the monthly interest rates received on the District’s bank accounts were competitive.
During our 25-month audit period, the District earned $114 in investment earnings, even though it had an average of $530,000 available to invest each month. Had officials considered alternative legally permissible investment options, the District may have increased the investment earnings by more than $52,000.
Because officials did not develop and manage a comprehensive investment program, they missed an opportunity for the District to realize additional revenues which would benefit District operations and potentially reduce the financial burden for District taxpayers.
The report includes three recommendations that, if implemented, will improve the District’s investment practices. District officials generally agreed with our recommendations and indicated they planned to initiate corrective action.
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 C.
The Board has the responsibility to initiate corrective action. Pursuant to Section 181-b of New York State 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.