[read complete report – pdf] 

Audit Objective

Did the Machias Fire District (District) Board of Fire Commissioners (Board) and Treasurer properly manage the District’s financial operations?

Audit Period

January 1, 2024 – May 31, 2025.

We extended the audit period back to fiscal year 2023 to review fixed asset records, and forward to June 18, 2025 to review Annual Financial Report (AFR) filings.

Understanding the Audit Area

A board of fire commissioners (fire district board) is responsible for managing and controlling the fire district’s financial operations 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. A fire district treasurer (treasurer) should record and report financial transactions in a timely and accurate manner to enable the fire district board to provide financial oversight and to make informed financial decisions. Accurate and timely records are essential for establishing financial accountability, ensuring proper financial management, providing transparency to taxpayers and fire district residents, and protecting public funds from misuse.

The District’s budgeted appropriations for 2023, 2024 and 2025 were $154,000, $156,000 and $313,000,¹ respectively.

Audit Summary

The Board and Treasurer did not properly manage the District’s financial operations. As a result, the Board and Treasurer hindered their ability to make informed financial decisions, assess the District’s financial standing and properly plan for the future. Furthermore, without proper guidance and management of operations, the Board and Treasurer cannot assure taxpayers, District residents and other interested parties that the District’s financial activities are adequately accounted for and reported. This mismanagement diminished transparency and accountability and increased the risk of financial errors, loss, waste, and fraud.

Specifically:

• The Board did not develop and adopt financial policies required by New York State General Municipal Law (GML), including an investment policy, a procurement policy and a code of ethics. 
• The Board Chairman (Chairman) and four other Commissioners had a limited understanding of their financial responsibilities, and did not complete the mandatory fiscal oversight training as required by New York State Town Law (Town Law) Section 176-e. 
• The Treasurer did not properly perform bank reconciliations or submit bank statements and bank reconciliations to the Board for review. 
• The Treasurer did not file the District’s AFRs with the Office of the New York State Comptroller (OSC) in a timely manner, as the AFRs for four fiscal years (2020 through 2023) were filed between 355 and 1,441 days late.² 
• The Treasurer did not submit records to the Board annually as required by Town Law Section 177, and the Board did not conduct an annual audit of the Treasurer’s records. 
• The Board did not develop and adopt written multiyear financial or capital plans. 

The report includes 10 recommendations that, if implemented, will help the Board and Treasurer manage the District’s financial operations. District officials agreed with our recommendations and indicated they would 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. 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.

1 The $313,000 budget for 2025 includes $153,000 budgeted for apparatus.  

2 OSC’s website provides more information on AFR nonfilers and the District’s current AFR filing status at: https://web.osc.state.ny.us/localgov/afr-non-filers/.