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Mattituck Fire District
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Financial Statements (Regulatory Basis)
with Independent Auditor's Report
December 31, 2019
MATTITUCK FIRE DISTRICT
Table of Contents
December 31,2019
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Page
Independent Auditor's Report 1
Basic Financial Statements(Regulatory Basis)
Balance Sheet-General Fund and Account Groups 3
Statement of Revenues,Expenditures and Changes in
Fund Balance-General Fund 4
Statement of Fiduciary Net Position-Fiduciary Fund 5
Notes to Financial Statements 6
Other Supplementary Information
Schedule of Revenues,Expenditures and Changes in Fund Balance
-Budget and Actual-General Fund-Operating 21
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 22
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_ VINCENT D.CULLEN,CPA
�� ���1 C1 950-2013)
CULLEN (&DANOWSKI, LLP
CERTIFIED P'U-B-I_IC�ACC +UNTANTS JAMES F.
ODRIG U Z,CPA
'- PETER F.RODRIGUEZ,CPA
JILL S.SANDERS,CPA
INDEPENDENT AUDITOR'S REPORT DONALD J.HOFFMANN,CPA
1 CHRISTOPHER V.REINO,CPA
ALAN YU,CPA
To the Board of Fire Commissioners
tj Mattituck Fire District
Mattituck,New York
Report on Financial Statements
1 We have audited the accompanying financial statements (regulatory basis) of the Mattituck Fire District,as of
and for the year ended December 31, 2019, and the related notes to the financial statements, as listed in the
table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the financial reporting provisions of the New York State Office of the State Comptroller, as
described in Note 1,to meet the reporting requirements of New York State. Management is also responsible
for the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement,whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in GovernmentAuditing Standards,issued by the Comptroller
General of the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment,including the assessment of
the risks of material misstatement of the financial statements,whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
ycontrol. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management,as
well as evaluating the overall presentation of the financial statements.
— We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Basis for Adverse Opinion on U.S.Generally Accepted Accounting Principles
As described in Note 1,the financial statements are prepared by the Mattituck Fire District,on the basis of the
financial reporting provisions of the New York State Office of the State Comptroller, which is a basis of
_ accounting other than accounting principles generally accepted in the United States of America, to meet the
requirements of the New York State Office of the State Comptroller.
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j 1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060
PHONE:631-473-3400•FAX:631-473-4863•WWW.CDURNET
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The effects on the financial statements of the variances between the regulatory basis of accounting described
in Note 1 and accounting principles generally accepted in the United States of America,although not reasonably
!_ determinable,are presumed to be material.
Adverse Opinion on U.S.Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on U.S.
- Generally Accepted Accounting Principles" paragraph, the financial statements referred to above do not
present fairly,in accordance with accounting principles generally accepted in the United States of America,the
financial position of the Mattituck Fire District,as of December 31,2019,and the respective changes in financial
position for the year then ended.
Unmodified Opinion on Regulatory Basis of Accounting
In our opinion,the financial statements referred to above present fairly,in all material respects,the respective
financial position of each fund and account group of the Mattituck Fire District, as of December 31, 2019, and
their respective changes in financial position for the year then ended,in accordance with the financial reporting
provisions of the New York State Office of the State Comptroller as described in Note 1.
Other Matters
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Mattituck Fire District's basic financial statements. The other supplementary information on page
21 is presented for purposes of additional analysis and is not a required part of the basic financial statements.
The other supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial statements
and certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America.In our opinion,the other supplementary information is fairly stated,
in all material respects, in relation to the basic financial statements as a whole on the basis of accounting
described in Note 1.
Other Reporting Required by Government Auditing Standards
In accordance with Govern men tAuditing Standards,we have also issued our report dated September 14,2020,
on our consideration of the Mattituck Fire District's internal control over financial reporting and our tests of
its compliance with certain provisions of laws,regulations,contracts,and grant agreements and other matters.
The purpose of that report is solely to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing,and not to provide an opinion on the effectiveness of
the Mattituck Fire District 's internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with GovernmentAuditing Standards in considering Mattituck
Fire District's internal control over financial reporting and compliance.
September 14,2020
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MATTITUCK FIRE DISTRICT
Balance Sheet-General Fund and Account Groups
December 31,2019
Account Groups
Non-Current Non-Current
r' General Governmental Governmental
Fund Assets Liabilities Total
ASSETS
Cash
- Unrestricted $ 1,075,171 $ $ $ 1,075,171
Restricted 871,571 871,571
Prepaids 51,262 51,262
f Land 822,000 822,000
L Buildings and improvements 3,258,025 3,258,025
Equipment 6,505,697 6,505,697
Amounts to be provided for
retirement of long-term debt 84,163 84,163
Total Assets $ 1,998,004 $ 10,585,722 $ 84,163 $ 12,667,889
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LIABILITIES
Accounts payable $ 47,583 $ $ $ 47,583
Accrued liabilities 2,230 2,230
Due to employees'retirement system 25,442 25,442
Compensated absences payable 31,712 31,712
_ Net pension liability-proportionate share 27,009 27,009
Total Liabilities 49,813 - 84,163 133,976
FUND BALANCE
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Investment in non-current governmental assets 10,585,722 10,585,722
L Nonspendable:prepaids 51,262 51,262
Restricted:
Capital,building 427,460 427,460
Capital,equipment 444,111 444,111
Assigned 13,500 13,500
Unassigned 1,011,858 1,011,858
Total Fund Balance 1,948,191 10,585,722 - 12,533,913
Total Liabilities and Fund Balance $ 1,998,004 $ 10,585,722 $ 84,163 $ 12,667,889
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See Notes to Financial Statements -3-
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MATTITUCK FIRE DISTRICT
Statement of Revenues,Expenditures and Changes in Fund Balance-General Fund
For the Year Ended December 31,2019
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Capital
Operating Reserves Total
REVENUES
Real property taxes $ 2,047,802 $ $ 2,047,802
Interest and earnings 731 478 1,209
f Rentals 18,358 18,358
- Sale of equipment 379 379
Refund of prior year expenditures 3,350 3,350
i Total Revenues 2,048,912 22,186 2,071,098
EXPENDITURES
Personal services 221,308 221,308
Equipment and capital outlay 61,863 1,009,509 1,071,372
Fire protection 664,250 664,250
State retirement system 23,389 23,389
i Service award program 278,127 278,127
Social security 16,915 16,915
Workers'compensation 54,013 54,013
Life insurance 19,481 19,481
Unemployment insurance 16 16
Medical and accident insurance 52,606 52,606
Debt service-principal 108,000 108,000
Debt service-interest 2,539 2,539
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Total Expenditures 1,502,507 1,009,509 2,512,016
f Excess(Deficiency)of Revenues Over Expenditures 546,405 (987,323) (440,918)
OTHER FINANCING SOURCES(USES)
Operating transfers in 545,000 545,000
Operating transfers(out) (545,000) (545,000)
Total Other Financing Sources(Uses) (545,000) 545,000 -
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Net Change in Fund Balance 1,405 (442,323) (440,918)
- Fund Balance-Beginning of Year 1,075,215 1,313,894 2,389,109
- Fund Balance-End of Year $ 1,076,620 $ 871,571 $ 1,948,191
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' See Notes to Financial Statements -4-
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MATTITUCK FIRE DISTRICT
Statement of Fiduciary Net Position-Fiduciary Fund
December 31,2019
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Agency
ASSETS
Service award program assets $ 5,000,046
Total Assets $ 5,000,046
LIABILITIES
i Service awards $ 5,000,046
Total Liabilities $ 5,000,046
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See Notes to Financial Statements -5-
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Mattituck Fire District(District) as of and for the year ended December 31,
2019,have been prepared in accordance with the financial reporting provisions of the New York State Office
of the State Comptroller (Regulatory Basis), which is a comprehensive basis of accounting other than
accounting principles generally accepted in the United States of America (GAAP) for governmental units.
The Governmental Accounting Standards Board (GASB) is the standard setting body for establishing GAAP
for governmental units. The financial statements of the District have been prepared using only the current
financial resources measurement focus and the modified accrual basis of accounting. This method differs
from GAAP,which requires the preparation of additional financial statements using the economic resources
measurement focus and the accrual basis of accounting. GAAP basis financial statements require the
capitalization and depreciation of property and equipment and the recording of long-term liabilities.Under
the regulatory basis of accounting, property and equipment are recorded as an expenditure when
purchased,the proceeds of long-term debt are reported as other financing sources and the payment of long-
term debt and other long-term liabilities are recognized to the extent that the liabilities mature during the
year. In addition,GAAP requires the financial statements to be prepared in accordance with GASB Statement
No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments. GASB 34 financial statements require the presentation of government-wide financial
statements and management's discussion and analysis. The accounting practices used to prepare these
financial statements do not require compliance with GASB 34.
The significant accounting policies of the District are described below:
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A. Financial Reporting Entity
The District is a district corporation and political subdivision of the State of New York,distinct from the
municipalities in which it is located. In general, the District is governed by an elected board of fire
commissioners (Board) and is required to have a treasurer and a secretary. The District has the legal
authority to levy taxes on real property and to borrow in its own name. The District is governed by
General Municipal Law and other laws of the state of New York and its subdivisions. The scope of
�— activities included in the accompanying financial statements is the transactions which comprise the
_ District's operations.
The primary function of the District is to provide fire-protection, rescue and emergency services to the
community. Services such as firefighting, fire prevention and public education support the primary
function.
The financial reporting entity includes all funds, functions and organizations over which the District's
Board exercises oversight responsibility. Oversight responsibility is determined on the basis of financial
interdependency, selection of governing authority, designation of management, ability to significantly
influence operations and accountability for fiscal matters.
j B. Basis of Presentation
Fund Financial Statements
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The District uses funds to report on its financial position and the results of its operations. Fund
accounting is designed to demonstrate legal compliance and to assist management by segregating
transactions related to certain government functions or activities. A fund is a separate accounting entity
with a self-balancing set of accounts.
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
-- The District records its transactions in the fund types described below:
Governmental Funds
Governmental funds are those through which most governmental functions are financed. The
' acquisition,use and balances of expendable financial resources and the related liabilities are accounted
_ for through governmental funds. The measurement focus of the governmental funds is based upon
i determination of financial position and changes in financial position. The District utilizes the following
governmental fund:
General Fund - the general fund is the principal operating fund of the District. It is used to
account for all financial resources except those required to be accounted for in another fund.
Fiduciary Funds
Fiduciary funds are used to account for assets held by the District in a trustee or custodial capacity.
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Agency Fund - the agency fund is used to account for money (and or property)ty) received and
held in the capacity of trustee,custodian,or agent.
Account Groups
Account groups are used to establish accounting control and accountability for the District's capital
assets and general long-term obligations. The two account groups are not"funds". They are accounting
--- entities, not fiscal entities, and are concerned only with the measurement of financial position, and not
with the results of operations. The District utilizes the following account groups:
Non-Current Governmental Assets Account Group - the non-current governmental assets
account group is used to account for land,land improvements,buildings and improvements,and
equipment owned by the District.
Non-Current Governmental Liabilities Account Group - the non-current governmental
liabilities account group is used to account for all long-term debt and other obligations of the
District.
C. Measurement Focus and Basis of Accounting
The governmental fund statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized when measurable and
available. The District considers all revenues reported in the governmental funds to be available if the
_+ revenues are collected within 60 days after the end of the fiscal year. Expenditures are recorded when
the related fund liability is incurred, except for principal and interest on general long-term debt,
compensated absences and pension costs,which are recognized as expenditures to the extent they have
matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of
T general long-term debt and acquisitions under capital leases are reported as other financing sources.
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I I D. Real Property Taxes
-- Real property taxes are levied annually by the District no later than November 1St and become a lien on
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December 1St. The District's tax levy is collected by the Town of Southold and then remitted to the District
- generally from January to June. The County of Suffolk is responsible for all uncollected taxes.
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
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E. Use of Estimates
The preparation of financial statements in conformity with a comprehensive basis of accounting other
than accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amount of assets, deferred outflows of
resources,liabilities and deferred inflows of resources and disclosure of contingencies at the date of the
financial statements and the reported revenues and expenditures during the reporting period.
Accordingly, actual results could differ from those estimates. Estimates and assumptions are made in a
variety of areas,including compensated absences.
F. Cash
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Cash consists of cash on hand, demand deposits and short-term investments with original maturities of
-, three months or less from date of acquisition.
Certain cash balances are restricted by various legal and contractual obligations,such as legal reserves.
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} G. Prepaid Items
17 Prepaid items represent payments made by the District for which benefits extend beyond year end.
These payments to vendors reflect costs applicable to future accounting periods and are recorded as
�-� assets on the Balance Sheet using the consumption method. Under the consumption method, a current
asset for the prepaid item is recorded at the time of receipt and/or purchase and an expenditure is
< < reported in the year the goods or services are consumed.
_ A portion of fund balance has been classified as nonspendable to indicate that prepaids do not constitute
available spendable resources.
H. Capital Assets
Capital assets are reported in the non-current governmental assets account group at original cost,when
the information is available, or estimated historical cost based on professional third-party information.
Donated assets are reported at acquisition value at the date of donation. Capital thresholds, the dollar
value above which asset acquisitions are added to the capital asset accounts are reported as follows:
�I Capitalization
Threshold
- Land $ 1,000
i Buildings and improvements 1,000
Equipment 1,000
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I. Employee Benefits-Compensated Absences
t Compensated absences consist of unpaid accumulated sick leave and vacation time.
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Sick leave eligibility and accumulation is specified in District policy. Upon retirement, resignation or
death,employees may receive a payment based on unused accumulated time.
Vacation eligibility and accumulation is specified in the annual reorganization meeting of the Board of
Fire Commissioners. Some earned benefits may be forfeited if not taken within varying time periods.
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
i (Continued)
Employees are compensated for unused accumulated vacation leave through paid time off or cash
payment upon retirement,termination or death.
The liability for compensated absences has been calculated using the vesting method and accrual for that
liability is included in the non-current governmental liabilities account group. The compensated
- absences liability is calculated based on the pay rates in effect at year-end.
In the fund financial statements, a liability is reported only for payments due for unused compensated
_i absences for those employees that have obligated themselves to separate from service with the District
by December 31St.
J. Other Benefits
Eligible District employees participate in the New York State and Local Employees'Retirement System.
Eligible volunteer firefighters participate in the District sponsored Length of Service Award Program.
The District provides health insurance coverage for active employees pursuant to District policy.
K. Fund Balance
The governmental fund statements report fund balance classifications according to the relative
-' strength of spending constraints placed on the purpose for which resources can be used,as follows:
l Nonspendable - Consists of amounts that are inherently nonspendable in the current period either
because of their form or because they must be maintained intact.Nonspendable fund balance consists
of prepaids,which are recorded in the general fund.
i Restricted-Consists of amounts that are subject to externally enforceable legal purpose restrictions
imposed by creditors, grantors, contributors, or laws and regulations of other governments; or
through constitutional provisions or enabling legislation. The District has established the following
restricted fund balances:
Capital Reserve
A Capital Reserve (General Municipal Law Section 6-g) is used to finance all or part of the costs of
construction, reconstruction, or acquisition of "specific' or "type" capital improvements or
^� equipment. The establishment of any capital reserve is subject to mandatory referendum (voter
approval). Expenditures from a "specific" reserve require a resolution by the Board of Fire
Commissioners. Expenditures from a "type" reserve require a resolution by the Board of Fire
Commissioners,subject to permissive referendum.
Assigned- Consists of amounts that are subject to a purpose constraint that represents an intended
use established by the District's Board of Fire Commissioners.The purpose of the assignment must be
narrower than the purpose of the general fund, and in funds other than the general fund, assigned
fund balance represents the residual amount of fund balance. Assigned fund balance includes an
- amount appropriated to partially fund the subsequent year's budget, as well as encumbrances not
classified as restricted at the end of the fiscal year.
Unassigned- represents the residual classification for the District's general fund and could report a
surplus or deficit. In funds other than the general fund,the unassigned classification is used only to
report a deficit fund balance resulting from the overspending of available resources.
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J MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
Fund Balance Classification
Any Portion of fund balance may be applied or transferred for a specific purpose either by voter approval
if required by law or by formal action of the Board of Fire Commissioners if voter approval is not
required. Amendments or modification to the applied or transferred fund balance must also be approved
by formal action of the Board of Fire Commissioners.
! i The Board of Fire Commissioners shall retain the authority to assign fund balance.
_ In circumstances where an expenditure is incurred for a purpose for which amounts are available in
multiple fund balance classifications (e.g., expenditures related to reserves) the expenditure is to be
-�' spent first from the restricted fund balance to the extent that an approved permissive referendum is in
place or the reserve has been appropriated by the Board of Fire Commissioners,then from the assigned
fund balance to the extent that there is an appropriation and then from the unassigned fund balance.
2. STEWARDSHIP.COMPLIANCE AND ACCOUNTABILITY
A. Budgets
The District administration prepares a proposed budget for approval by the Board for the general fund,
the only fund with a legally adopted budget.Budgets are adopted annually on the modified accrual basis
of accounting.
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Appropriations are established by the adoption of the budget,are recorded at the program line item level,
and constitute a limitation on expenditures (and encumbrances) that may be incurred.Appropriations
authorized for the year are increased by the amount of encumbrances carried forward from the prior
k year.Appropriations lapse at the end of the fiscal year unless expended or encumbered. Encumbrances
- will lapse if not expended in the subsequent year. Appropriations authorized for the current year can be
funded by the planned use of specific reserves, and can be increased by budget amendments approved
by the Board of Fire Commissioners as a result of selected new revenue sources not included in the
original budget (when permitted by law) and appropriation of fund balances. These supplemental
appropriations may occur subject to legal restrictions,if the Board of Fire Commissioners approves them
because of a need that exists which was not determined at the time the budget was adopted. A summary
—' of the general fund operating budget is as follows:
Original budget approved by the Board of Fire Commissioners $ 2,047,783
_r Encumbrances from prior year 50,801
Final Budget $ 2,098,584
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B. Encumbrances
Encumbrance accounting is used for budget control and monitoring purposes and is reported as a part
of the governmental funds. Under this method, purchase orders, contracts and other commitments for
the expenditure of monies are recorded to reserve applicable appropriations. Outstanding
encumbrances as of year-end are presented as part of assigned fund balance, unless classified as
restricted or committed, and do not represent expenditures or liabilities. These commitments will be
!� honored in the subsequent period. Related expenditures are recognized at that time, as the liability is
incurred or the commitment is paid.
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Notes to Financial Statements
(Continued)
C. Over Expenditure of Certain Appropriations
Certain general fund appropriations were over expended. These were in the following categories of the
budget:personal services,fire protection,service award program,social security and life insurance. The
general fund budget,in total,was not over expended.
Ln 3. DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS
The District's investment policies are governed by state statutes and District policy. Resources must be
deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies
located within the state.Permissible investments include obligations of the U.S.Treasury and U.S.Agencies,
—� repurchase agreements and obligations of New York State or its localities.Collateral is required for demand
and time deposits and certificates of deposit not covered by FDIC insurance.Obligations that may be pledged
�I as collateral are obligations of the United States and its Agencies and obligations of New York State and its
municipalities.Investments are stated at fair value.
Custodial credit risk is the risk that in the event of a bank failure, the District may be unable to recover
deposits or collateral securities that are in possession of an outside agency. GASB directs that deposits be
disclosed as exposed to custodial credit risk if they are not covered by depository insurance and the deposits
are as follows:
A. Uncollateralized,
_.1 B. Collateralized by securities held by the pledging financial institution,or
C. Collateralized by securities held by the pledging financial institution's trust department or agent but
not in the District's name.
The District's aggregate bank balances were covered by FDIC insurance or fully collateralized by securities
pledged on the District's behalf at year end.
The District did not have any investments at year end or during the year.Consequently,the District was not
-- exposed to any material interest rate risk.
4. CAPITAL ASSETS JPRIOR PERIOD ADJUSTMENT
_ During the year ended December 31, 2019,an updated inventory was received from a third-party vendors.
As a result of receiving this updated inventory,it was necessary for the District to adjust the December 31,
2018 capital balances as follows:
As Reported As Restated
r December 31, December 31, Increase
2018 2018 (Decrease)
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J Land $ 787,000 $ 822,000 $ 35,000
Buildings and improvements 3,711,964 3,258,025 (453,939)
Equipment 5,853,957 5,853,957 -
$ 10,352,921 $ 9,933,982 $ (418,939)
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
—� Capital asset balances and activity for the year ended December 31,2019,are as follows.
As Restated
Balance Balance
December 31, December 31,
2018 Additions Deletions 2019
Land $ 822,000 $ $ $ 822,000
Buildings and improvements 3,258,025 - - 3,258,025
17 Equipment 5,853,957 1,110,467 (458,727) 6,505,697
U $ 9,933,982 $ 1,110,467 $ (458,727) $ 10,585,722
S. CAPITAL RESERVES
Activity for the capital reserves during the year under audit is as follows:
Building Equipment
Reserve Reserve Total
Reserve Balance-Beginning of Year $ 238,271 $ 1,075,623 $ 1,313,894
-� Additions to Reserve:
i I Board Approved Transfers:
Planned Budget Increase 197,500 347,500 545,000
Interest 189 289 478
Rentals 18,358 18,358
Refund of prior year expenditures 3,350 3,350
Use of Reserve
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Capital Outlay (8,500) (1,001,009) (1,009,509)
Reserve Balance-End of Year $ 427,460 $ 444,111 $ 871,571
6. LONG-TERM LIABILITIES
Long-term liability balances and activity for the year,excluding pension,are summarized below:
Balance Balance Amounts
December 31, December 31, Due Within
2018 Additions Reductions 2019 One Year
- Long-term debt:
Bonds payable 108,000 (108,000)
Other long-term liabilities
Retroactive memebership due 25,442 25,442 1,504
i Compensated absences 31,712 - 31,712 20,582
108,000 57,154 (108,000) 57,154 22,086
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
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- The general fund has typically been used to liquidate long-term liabilities. Additions and reductions to
compensated absences are shown net since it is impractical to separately determine these amounts. The
maturity of compensated absences is not determinable.
A. Bonds Payable
During the current year,the two outstanding serial bonds issued by the District were satisfied. Interest
on long-term debt for the year was$2,539.
7. PENSION PLAN-NEW YORK STATE
A. New York State and Local Employees'Retirement System
Plan Description
The District participates in the New York State and Local Employees'Retirement System(ERS). This is
a cost-sharing,multiple-employer defined benefit retirement system.The system provides retirement,
-- disability,withdrawal and death benefits to plan members and beneficiaries related to years of service
iand final average salary.
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Provisions and Administration
Obligation of employers and employees to contribute and benefits to employees are governed by the
New York State Retirement and Social Security Law(NYSRSSL).The net position of the ERS is held in
+ the New York State Common Retirement Fund (the Fund),which was established to hold all net assets
I and record changes in plan net position allocated to the ERS. As set forth in the NYSRSSL, the
Comptroller of the State of New York serves as the trustee of the Fund and is the administrative head
- ? of the ERS. Once a public employer elects to participate in the ERS,the election is irrevocable. The New
York State Constitution provides that pension membership is a contractual relationship and plan
benefits cannot be diminished or impaired. Benefits can be changed for future members only by
enactment of a State statute. The District also participates in the Public EmployeesGroup Life
r Insurance Plan(GLIP),which provides death benefits in the form of life insurance. The ERS is included
in the State's financial report as a pension trust fund.That report,including information with regard to
-- benefits provided may be found at www.osc.state.ny.us/retire/publications/index.php or may be
obtained by writing to: New York State and Local Employees' Retirement System, 110 State Street,
Albany, NY 12244.
j Funding Policies
Plan members who joined the system before July 27, 1976, are not required to make contributions.
Those joining on or after July 27,1976,and before January 1,2010,with less than ten years of credited
- services are required to contribute 3% of their salary. Those joining on or after January 1, 2010 and
before April 1, 2012, are required to contribute 3% of their salary throughout active membership.
r Those joining on or after April 1, 2012, are required to contribute between 3% and 6% dependent on
t ! their salary throughout active membership. Employers are required to contribute at an actuarially
determined rate based on covered salaries paid. For the ERS, the Comptroller annually certifies the
actuarially determined rates expressly used in computing the employers' contributions for the ERS'
fiscal year ended March 31St, and employer contributions are either paid by December 15th less a 1%
discount or by February 1St.The District paid 100% of the required contributions as billed by the ERS
for the current year.The Districts average contribution rate was 15.33%of covered payroll for the ERS'
fiscal year ended March 31, 2020.
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- MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
t_
The Comptroller annually certifies the actuarially determined rates expressly used in computing the
employers' contributions based on salaries paid during the ERS' fiscal year ending March 31. The
resulting contributions paid in the current year and two preceding years were equal to 100 percent of
F7 the contributions required,and were as follows:
U
2019 2018 2017
District contributions paid $ 29,185 $ 31,185 $ 28,592
B. Pension Liabilities
At December 31, 2019,the District reported the following liability for its proportionate share of the net
pension liability for the ERS in the non-current governmental liabilities account group.The net pension
liability was measured as of March 31,2019.The total pension liability used to calculate the net pension
-- liability was determined by an actuarial valuation as of that date. The District's proportion of the net
pension liability was based on a projection of the District's long-term share of contributions to the system
relative to the projected contributions of all participating members, actuarially determined. This
information was provided by the ERS in reports provided to the District.
Measurement date March 31,2019
District's proportionate share of
the net pension liability $ 27,009
District's portion of the Plan's total
j the net pension liability 0,0003812%
Change in proportion since the
- prior measurement date (0.0001126)
Actuarial Assumptions
The total pension liability as of the measurement date was determined by using an actuarial valuation as
noted in the table below,with update procedures used to roll forward the total pension liability to the
j measurement date.The actuarial valuation used the following actuarial assumptions:
Measurement date March 31,2019
Actuarial valuation date April 1,2018
Inflation 2.5%
Salary increases 4.2%
Investment rate of return(net of investment
expense,including inflation) 7.0%
L_J Cost of living adjustments 1.3%
Annuitant mortality rates are based on system experience with adjustments for mortality improvements
based on the Society of Actuaries'Scale MP-2014. The actuarial assumptions were based on the results
of an actuarial experience study for the period April 1, 2010-March 31,2015.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return(expected return,net
of investment expenses and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighing the expected future real rates of
return by the target asset allocation percentage and by adding expected inflation.
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1
- MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
- The target allocation and best estimates of the arithmetic real rates of return for each major asset class
are summarized as follows:
/ Long-term
Target Expected Rate
Allocation of Return
Measurement date March 31,2019
_ Asset type
Domestic equity 36.00 % 4.55 %
International equity 14.00 % 6.35 %
Real estate 10.00 % 5.55 %
Private equities 10.00 % 7.50 %
_ Alternative investments 8.00 % 3.75-5.68%
Bonds and mortgages 17.00 % 1.31 %
Cash 1.00 % (0.25)%
Inflation indexed bonds 4.00 % 1.25
100.00 %
Real rates of return are net of long-term inflation assumption of 2.5%.
Discount Rate
l�
The discount rate used to calculate the total pension liability was 7.0%.The projection of cash flows used
to determine the discount rate assumes that contributions from plan members will be made at the
current contribution rates and that contributions from employers will be made at statutorily required
-~' rates, actuarially determined. Based upon the assumptions, the System's fiduciary net position was
projected to be available to make all projected future benefit payments of current plan members.
Therefore,the long-term expected rate of return on pension plan investments was applied to all periods
of projected benefit payments to determine the total pension liability.
Sensitivity of the Proportionate Share of the Net Pension Liability to the Discount Rate Assumption
The following presents the District's proportionate share of the net pension liability calculated using the
discount rate of 7.0%, as well as what the District's proportionate share of the net pension
asset/(liability) would be if it were calculated using a discount rate that is 1 percentage point lower
(6.0%) or 1 percentage point higher(8.0%)than the current rate:
i"
Current
1%Decrease Assumption 1%Increase
(6.00)% (7.00)% (8.00)%
District's proportionate share of
the net pension asset(liability) $ (118,086) $ (27,009) $ 49,503
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
Pension Plan Fiduciary Net Position
L y The components of the current-year net pension liability of the employers, rounded to the nearest
thousand,as of the respective measurement date were as follows:
(Dollars in Thousands)
J l Measurement date March 31,2019
Employers'total pension liability $ (189,803,429)
j I
J Plan fiduciary net position 182,718,124
r - Employers'net pension liability $ (7,085,305)
Ratio of plan fiduciary net position to the
employers'total pension liability 96.27%
Prepayment to the Pension Plan
Employer contributions are paid annually based on the system's fiscal year,which ends on March 31St.
Annual payments are due February 1St.An employer can elect to prepay the amount due by December
151h to receive a 1% discount. The District paid the annual invoice in December, which resulted in a
prepayment of$7,796 for the period January 1, 2019 through March 31, 2020. Employee contributions
are remitted monthly.
^� C. Retroactive Membership
�,
- Retroactive membership represents amounts due for employees' time and services rendered at the
District prior to the District electing to join the ERS. An actuarial study performed by the ERS calculated
a deficiency due based on retroactive membership that is payable over twenty five years through 2029
requiring annual payments of$8,403 per year of principal and interest at 8.0%. The annual payment is
included in state retirement system expenditures in the general fund. The outstanding principal balance
at December 31, 2019,is$25,442.
D. Length of Service Award Program(LOSAP)
The District established a defined benefit LOSAP for the active volunteer firefighters of the Mattituck Fire
Department. The program took effect on January 1, 1992. The program was established pursuant to
Article 11-A of the General Municipal Law. The program provides municipally-funded pension-like
benefits to facilitate the recruitment and retention of active volunteer firefighters. The District is the
sponsor of the program.The information contained in this note is based on information for the Length of
Service Award Program for the plan year ended on December 31,2019.
Program Description
Participation, Vesting and Service Credit
Active volunteer firefighters who have reached the age of 18 and who have completed 1 year of
firefighting service are eligible to participate in the program.Participants acquire a non-forfeitable right
to a service award after being credited with 5 years of firefighting services or upon attaining the
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MATTITUCK FIRE DISTRICT
_ Notes to Financial Statements
1 (Continued)
l.J
1 program's entitlement age. The program's entitlement age is age 62 and must complete one year of
service.Active members can earn additional credit after 62. In general,an active firefighter is credited
with a year of firefighting service for each calendar year after the establishment of the program which
- he or she accumulates fifty points. Points are granted for the performance of certain activities in
accordance with a system established by the sponsor on the basis of a statutory list of activities and
point values.A participant may also receive credit for 5 years of firefighting service rendered prior to
- the establishment of the program. A participant becomes 100%vested upon earning 5 years of service
credit,attaining entitlement age while an active member,becoming totally or permanently disabled,or
upon death. Benefits are forfeited when a participant membership has terminate and the participant
7 has less than 5 year of credit service.
it
Benefits
f�l A participant's benefit under the program is the life annuity with 10 years certain equal to $20
_ multiplied by the person's total number of years of firefighting service. The number of years of
firefighting service used to compute the benefit cannot exceed 40, and, except in the case of disability
or death, benefits are payable when a participant reaches entitlement age. The program provides
statutorily mandated death and disability benefits.
Fiduciary Investment and Control
Service credit is determined by the governing board of the sponsor,based on information certified to
-- the governing board by each fire company having members who participate in the program. Each fire
company must maintain all required records on forms prescribed by the governing board.
The governing board of the sponsor has retained and designated Penflex, Inc. to assist in the
administration of the program. The designated program administrator's primary responsibility is to
administer the plan for the exclusive benefit of the participants and their beneficiaries. Such duties
include,but are not limited to,determining eligibility of firefighters to participate in the plan,compute
participant entitlement, authorize disbursements to participants, compute necessary contribution
amounts, maintain all necessary records and consult with the sponsor and the trustee on long-term
investment plans. Disbursements of program assets for the payment of benefits or administrative
expenses must be reviewed by the trustee,the Board of Fire Commissioners,and signed by at least two
'�_J board members prior to being disbursed by the administrator.
Program assets are required to be held in trust by LOSAP legislation, for the exclusive purpose of
providing benefits to participants and their beneficiaries or for the purpose of defraying the reasonable
expenses of the operation and administration of the program.The trust agreement is dated in 1992 and
the trustee is the Board of Fire Commissioners.
Authority to invest program assets is vested in the administrator, with the Board of Fire
Commissioners' prior written approval. Subject to restrictions in the program document, program
assets are invested in accordance with a statutory"prudent person" rule.The program document calls
for all investment decisions to be chosen and approved by the trustee, prior to being invested by the
administrator.
The sponsor is required to retain an actuary to determine the amount of the sponsor's contributions to
the plan.The actuary retained by the sponsor for this purpose is Penflex,Inc. Portions of the following
information are derived from a report prepared by the actuary dated May 4, 2020 for the plan year
ended December 31,2019.
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MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
-i Program Financial Condition
J Assets and Liabilities
Actuarial Present Value of Benefits at December 31,2019 $ 5,534,724
Less:
Assets Available for Benefits
%of total
�ff
I Cash 33.37% $ 1,668,345
Investments 66.63% 3,331,701
UU Total Net Assets Available for Benefits 5,000,046
Total Unfunded Benefits 534,678
Less:Unfunded Liability for Prior Service (534,678)
Unfunded Normal Benefits $
Prior Service Costs
' i
i Prior service costs are being amortized over 11 years at a discount rate of 5.50%.
Receipts and Disbursements
_i
Plan Net Assets,Beginning of Year $ 4,160,722
i
Changes during the year
+Plan contributions $ 273,900
+Investment income earned 833,384
-Plan benefit withdrawals (267,960)
839,324
Plan Net Assets,End of Year $ 5,000,046
Contributions
r Sponsor's contribution recommended by actuary: $ 280,928
Amount of sponsor's actual contribution: 278,127
Ir�1
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{ � - 18-
MATTITUCK FIRE DISTRICT
_ Notes to Financial Statements
(Continued)
Normal Costs
The actuarial valuation methodology used by the actuary to determine the sponsor's contribution is the
unit credit cost method. The assumptions used by the actuary to determine the sponsor's contribution
and the actuarial present value of benefits are:
Assumed rate of return on investment 5.50%
�— Mortality tables used for
Withdrawal None
Disability None
Retirement RP-2014 Male Mortalit3
Death(actives) None
Death(inactives) None
Other None
8. COMMITMENTS AND CONTINGENCIES
A. Encumbrances
All encumbrances are classified as either restricted or assigned fund balance.At December 31, 2019,the
District encumbered the following amounts:
Assigned Fund Balance:
General Fund
Fire protection $ 13,500
B. Risk Management
' i
— The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
_ assets; injuries to employees; errors and omissions; and natural disasters, etc. These risks are covered
by commercial insurance purchased from independent third parties. Settled claims from these risks have
not exceeded commercial insurance coverage for the past three years.
C. Litigation
The District is not aware of any material,pending or threatened litigation claims against the District. The
District is also unaware of any unasserted claims or assessments that would require financial statement
disclosure.
{
- 19-
MATTITUCK FIRE DISTRICT
Notes to Financial Statements
(Continued)
D. Operating Leases
i
- The District leases various equipment under non-cancelable operating leases.Rental expense for the year
{�I was$11,566.
- I Fiscal Year Ending December 31, Total
I 2020 $ 11,805
LJ 2021 10,251
2022 8,704
2023 8,965
2024 9,234
2025-2029 50,497
-I 2030-2033 39,356
$ 138,812
9. SPENDING LIMITATION
The District did not exceed the statutory spending limitation imposed by New York State Law for the year
ended December 31,2019,and the budget for the year ending December 31,2019.
10. SUBSEQUENT EVENT
I �
-- The District has evaluated subsequent events through the date of the auditor's report,which is the date the
financial statements were available to be issued. No significant events were identified that would require
adjustment of or disclosure in the financial statements.
I �
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MATTITUCK FIRE DISTRICT
Schedule of Revenues,Expenditures and Changes in Fund Balance-
Budget and Actual-General Fund-Operating
For the Year Ended December 31,2019
Board- Final Budget
Approved Final Variance with
Budget Budget Actual Actual
REVENUES
Real property taxes $ 2,047,783 $ 2,047,783 $ 2,047,802 $ 19
Interest and earnings 731 731
Sale of equipment 379 379
Total Revenues 2,047,783 2,047,783 2,048,912 $ 1,129
t�I
APPROPRIATED FUND BALANCE
Prior year's encumbrances 50,801
Total Revenues and Appropriated
Fund Balance $ 2,047,783 $ 2,098,584
Final Budget
Variance with
Year End Actual and
Encumbrances Encumbrances
EXPENDITURES
Personal services $ 192,804 $ 210,054 221,308 $ $ (11,254)
Equipment and capital outlay 95,000 104,000 61,863 42,137
Fire protection 629,390 653,941 664,250 13,500 (23,809)
State retirement system 28,500 28,500 23,389 5,111
Service award program 275,000 275,000 278,127 (3,127)
Social security 14,750 14,750 16,915 (2,165)
Workers'compensation 65,500 65,500 54,013 11,487
Life insurance 15,250 15,250 19,481 (4,231)
Unemployment insurance 1,050 1,050 16 1,034
Medical and accident insurance 75,000 75,000 52,606 22,394
Debt service-principal 108,000 108,000 108,000
Debt service-interest 2,539 2,539 2,539 -
Total Expenditures 1,502,783 1,553,584 1,502,507 13,500 37,577
OTHER FINANCING USES
Operating transfers out 545,000 545,000 545,000 -
I
- Total Expenditures and
Other Financing Uses $ 2,047,783 $ 2,098,584 2,047,507 $ 13,500 $ 37,577
i
Net Change in Fund Balance 1,405
Fund Balance-Beginning of Year 1,075,215
Fund Balance-End of Year $ 1,076,620
Note to Other Supplementary Information
Budget Basis of Accounting
Budgets are adopted on the modified accrual basis of accounting.
4 See Paragraph on Other Supplementary Information Included in Auditor's Report -21-
VINCENT D.CULLEN,CPA
~iL—_:c; 'r� \ (1950-2013)
CULLEN `&'Q ,,- ��QW KI, LLP
I , CERTIFIED P'LLB.L�IC ACC 'UNTANTS JAMES E.DANOWSKI,CPA
- -� I PETER F.RODRIGUEZ,CPA
JILL S SANDERS,CPA
'4 J DONALD J.HOFFMANN,CPA
CHRISTOPHER V.REINO,CPA
ALAN YU,CPA
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Fire Commissioners
J Mattituck Fire District
Mattituck,New York
We have audited,in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States,the financial statements of the Mattituck Fire District (District), as of
and for the year ended December 31,2019,and the related notes to financial statements,as listed in the table of
contents,which collectively comprise the District's basic financial statements and have issued our report thereon
dated September 14, 2020. As described more fully in Note 1, the Mattituck Fire District has prepared these
financial statements in accordance with the financial reporting provisions of the New York State Office of the
State Comptroller, which is a comprehensive basis of accounting other than accounting principles generally
accepted in the United States of America.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Mattituck Fire District's
internal control over financial reporting (internal control) to determine the audit procedures that are
i appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,but not
for the purpose of expressing an opinion on the effectiveness of the Mattituck Fire District's internal control.
Accordingly,we do not express an opinion on the effectiveness of the Mattituck Fire District's internal control.
' A deficiency in internal control exists when the design or operation of a control does not allow management or
_ employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal
control, such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
{� deficiency, or a combination of deficiencies,in internal control that is less severe than a material weakness,yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies. Given these limitations,during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However,material weaknesses may exist that have not been
i identified.
1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060 - 22-
PHONE:
22_PHONE:631-473-3400•FAX:631-473-4863•WWW.CDLLPNET
_i
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Mattituck Fire District's financial statements are
free of material misstatement,we performed tests of its compliance with certain provisions of laws,regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit,and accordingly,we do not express such an opinion. The results of
our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
We noted certain matters that we have reported to the Board of Fire Commissioners and management of the
Mattituck Fire District in a separate letter dated September 14,2020.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the results of that testing,and not to provide an opinion on the effectiveness of the District's internal control or
on compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the District's internal control and compliance.Accordingly,this communication is not
suitable for any other purpose.
i !
September 14,2020
I '
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- 23 -