Audit Objective
Did the Preston Fire District (District) Board of Fire Commissioners (Board) provide adequate oversight of the District’s financial activities?
Audit Period
January 1, 2022 – June 3, 2025
Understanding the Audit Area
The board of fire commissioners is responsible for managing and controlling the fire district’s financial operations by providing adequate oversight of the financial activities to help ensure public funds are managed with accountability, transparency and integrity. This critical function can help maintain public trust, ensure legal compliance and prevent mismanagement, waste and fraud. Adequate oversight includes adopting required policies, monitoring investments, properly auditing claims, annually auditing the fire district treasurer’s records and ensuring that annual financial reports (AFRs) are filed in a timely manner.
The District’s budgeted appropriations for 2025 were $57,300 and disbursements totaled $151,873 from January 1, 2022 through December 31, 2024. During our audit period, the District maintained a capital reserve fund in a savings account that offered 0.02 percent interest, and the average daily balance available for investment from this account was $208,626.
Audit Summary
The Board did not provide adequate oversight of the District’s financial activities. Specifically, the Board missed an opportunity for the District to realize additional revenues which would benefit District operations and potentially reduce the financial burden for District taxpayers.
Also, the Board did not:
- Adopt an investment policy or adequately monitor investments.
- Adequately audit claims
- Establish a procurement policy
- Annually audit the District Treasurer’s (Treasurer) records
- Ensure the AFRs were filed in a timely manner
Because the Board did not sufficiently oversee the District’s financial activities, its ability to ensure that all District purchases were legitimate District expenditures and were obtained at the best value was compromised. In addition, when the Board does not perform an annual audit or ensure that the AFRs are filed, transparency is diminished and the Board, taxpayers, OSC and other interested parties cannot assess the District’s financial standing.
While the District’s investments were legal, safe and liquid, investment yields could have been improved. Officials maintained the capital reserve fund in a savings account that offered 0.02 percent interest with earnings of $125 during the three complete fiscal years of the audit period. Had officials invested in an alternative investment available to the District, such as Treasury Bills, with an average rate of 3.89 percent interest, they could have realized additional earnings of approximately $26,000 during the same period.
Furthermore, we reviewed claims associated with 36 disbursements totaling $12,836 of the 172 disbursements totaling $151,873 that the District paid during the three completed fiscal years of the audit period and determined that there was no indication in the Board’s meeting minutes that 19 of the 36 claims were audited or approved by the Board. Additionally, because no procurement policy was in place, District officials did not have guidance on when and how to help ensure that they obtained the
best value possible when making purchases under legally required bidding thresholds.
The Board also did not ensure that the Treasurer presented her records to be audited each year, as required by New York State Town Law (Town Law) Section 177, to perform an independent verification that District funds were properly accounted for and transactions were properly recorded. Additionally, the Treasurer did not file the District’s AFRs with the Office of the State Comptroller (OSC) in a timely manner and had not filed the 2024 AFR as of the end of the audit period.
The report includes 13 recommendations that, if implemented, will improve the District’s oversight of financial activities. District officials agreed with our recommendations and indicated that they have initiated corrective action. Appendix C includes our comment on an issue District officials raised in their 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 (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, 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.