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HomeMy WebLinkAbout2021 J ypuT H p4O RF DISTR�G SOUTHOLD FIRE DISTRICT P.O. BOX 908. SOUTHOLD, N.Y. 11971 (631) 765-4305 FAX (631) 765-5076 August 30, 2022 Town of Southold Southold Town Hall Main Road, P.O. Box 1179 Southold,New York 11971 Re: Southold Fire District Dear Sir/Madam: In connection with the above matter, enclosed herewith please find a copy of the Auditor's Report prepared by Cullen&Danowski, LLP for the fiscal period beginning on January 1, 2021 and ending on December 31, 2021. If you have should have any questions or problems,please do not hesitate to contact me at 765-4305, x 27. S' cerely, oI A. Miller Fire District Secretary RECEIVED AUG 31 2022 Southold Town Clerk r - I I I^ s Southold Fire District Financial Statements (Regulatory Basis) with Independent Auditor's Report December 31, 2021 it l� 4 t SOUTHOLD FIRE DISTRICT Table of Contents December 31,2021 Page --, Independent Auditor's Report 1 i _ Financial Statements(Regulatory Basis) � I Balance Sheet-Governmental Funds and Account Groups 4 Statement of Revenues,Expenditures and Changes in Fund Balance-Governmental Funds 5 Notes to Financial Statements 6 i , Supplementary Information Schedule of Revenues,Expenditures and Changes in Fund Balance -Budget and Actual-General Fund-Operating 24 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 25 _I . I JAMES E.DANOWSKI,CPA !� VINCENT D.CULLEN,CPA JILL S.SANDERS,CPA CU,-L--LEN & (1950-2013) DONALD J.HOFFMANN,CPA o ' T PETER F.RODRIGUEZ,CPA MICHAEL J.LEONE,CPA D1 e�hl 00S 1�1,'LLP (RET.) CHRISTOPHER V.REINO,CPA y / ALAN YU,CPA CERTIFIED PUBL, IC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT To the Board of Fire Commissioners Southold Fire District Southold,New York � I Opinions We have audited the accompanying financial statements (regulatory basis) of the Southold Fire District (District), as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents. Unmodified Opinion on Regulatory Basis of Accounting j 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 Southold Fire District, as of December 31,2021,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. 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 Southold Fire District,as of December 31,2021,and the respective changes in financial position - for the year then ended. Basis for Opinions , f We conducted our audit in accordance with auditing standards generally accepted in the United States of America.Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.We are required to be independent of the District and to meet our other ethical responsibilities,in accordance with the relevant ethical requirements relating to our audit.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. i f Jf 1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060 0 ., PHONE:631-473-3400 9 FAX:631-473-4863•WWW.CDLLP.NET Basis for Adverse Opinion on U.S.Generally Accepted Accounting Principles As described in Note 1,the financial statements are prepared by the Southold 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. 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 and pervasive. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in -f 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 Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free _ from material misstatement,whether due to fraud or error,and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards,we: • Exercise professional judgment and maintain professional skepticism throughout the audit. s-1 • Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error,and design and perform audit procedures responsive to those risks.Such procedures include _ examining,on a test basis,evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 District's internal control.Accordingly,no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,that raise substantial doubt about the District's ability to continue as a going concern for a reasonable period -- of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,significant audit findings, and certain internal control-related matters that we identified during the audit. i � Other Matters Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively _ comprise the Southold Fire District's basic financial statements.The supplementary information on page 24 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The 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. The information has + been subjected to the auditing procedures applied in the audit of the basic financial statements and certain I additional procedures, including comparing and reconciling such information directly to the underlying L accounting and other records used to prepare the basic financial statements or to the basic financial statements —ff themselves, and other additional procedures in accordance with auditing standards generally accepted in the I United States of America.In our opinion,the 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 GovernmentAuditing Standards,we have also issued our report dated August 4,2022,on our r consideration of the Southold Fire District 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 i and compliance and the results of that testing,and not to provide an opinion on the effectiveness of the Southold Fire District internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Southold Fire District internal control over financial reporting and compliance. August 4,2022 . t f �I i , h- -3 - —t , I d SOUTHOLD FIRE DISTRICT Balance Sheet-Governmental Funds and Account Groups -- December 31,2021 Governmental Funds Account Groups i Non-Current Non-Current General Capital Governmental Governmental Fund Projects Assets Liabilities Total ASSETS � Cash Unrestricted $ 1,087,650 $ 100 $ $ $ 1,087,750 Restricted 1,727,660 72,844 1,800,504 - Accounts receivable 4,310 4,310 Due from other funds 3,577 3,577 Prepaids 76,731 76,731 Service award program 4,539,864 4,539,864 Land 715,686 715,686 Buildings and improvements 5,301,887 5,301,887 Equipment 4,570,997 4,570,997 Amount to be provided for retirement of long-term liabilities 6,520,043 6,520,043 1 Total Assets $ 7,439,792 $ 72,944 $ 10,588,570 $ 6,520,043 $ 24,621,349 _ LIABILITIES Accounts payable $ 62,913 $ $ $ $ 62,913 JI Accrued liabilities 9,531 9,531 Due to other funds 3,577 3,577 Bonds payable 1,300,000 1,300,000 Compensated absences payable 7,891 7,891 Net pension liability- --` proportionate share 333 333 Service award program 5,211,819 5,211,819 Total Liabilities 72,444 3,577 6,520,043 6,596,064 FUND BALANCE Investment in non-current t governmental assets 10,588,570 10,588,570 Nonspendable 76,731 76,731 Restricted: -� Debt service 3,477 3,477 d Capital,equipment 1,694,590 1,694,590 Capital,building 33,070 33,070 Service award program 4,539,864 4,539,864 Unspent bond proceeds 69,367 69,367 i Assigned:Unappropriated fund balance 393,281 393,281 �J Unassigned fund balance 626,335 626,335 Total Fund Balance 7,367,348 69,367 10,588,570 - 18,025,285 Total Liabilities and Fund Balance $ 7,439,792 $ 72,944 $ 10,588,570 $ 6,520,043 $ 24,621,349 d ; '-1 r �f i See Notes to Financial Statements -4- yt I d i SOUTHOLD FIRE DISTRICT Statement of Revenues,Expenditures and Changes in Fund Balance-Governmental Funds For the Year Ended December 31,2021 General Fund Length of Total Capital Service Award Capital Governmental Operating Reserves Program Total Projects Funds REVENUES Real property taxes $ 2,049,042 $ $ $ 2,049,042 $ $ 2,049,042 Interest and earnings 765 621 233,737 235,123 235,123 Rentals 28,534 28,534 28,534 Sale of equipment 25,000 25,000 25,000 Refund of prior year expenditures 3,184 3,184 3,184 Miscellaneous 53 53 53 - Contributions 367,000 367,000 367,000 Total Revenues 2,106,578 621 600,737 2,707,936 2,707,936 EXPENDITURES Personal services 250,534 250,534 250,534 Equipment and capital outlay 217,946 217,946 217,946 Fire protection 592,199 6,200 598,399 598,399 State retirement system 31,648 31,648 31,648 Service award program 367,000 351,060 718,060 718,060 Social security 20,652 20,652 20,652 Workers'compensation 57,111 57,111 57,111 Life insurance 47,221 47,221 47,221 Medical and accident insurance 40,130 40,130 40,130 _ Debt service-principal 100,000 100,000 100,000 Debt service-interest 30,080 30,080 30,080 - Total Expenditures 1,754,521 - 357,260 2,111,781 2,111,781 Excess of Revenues Over Expenditures 352,057 621 243,477 596,155 596,155 - OTHER FINANCING SOURCES(USES) Operating transfers in 6,618 150,000 156,618 156,618 Operating transfers out (150,000) (150,000) (6,618) (156,618) I L Total Other Financing Sources(Uses) (143,382) 150,000 - 6,618 (6,618) - Net Change in Fund Balance 208,675 150,621 243,477 602,773 (6,618) 596,155 Fund Balance-Beginning of Year 891,149 1,577,039 4,296,387 6,764,575 75,985 6,840,560 Fund Balance-End of Year $ 1,099,824 $ 1,727,660 $ 4,539,864 $ 7,367,348 $ 69,367 $ 7,436,715 4 See Notes to Financial Statements -5- I f - SOUTHOLD FIRE DISTRICT Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A The financial statements of the Southold Fire District (District) as of and for the year ended December 31, 2021,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. 1 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 +R� 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 i 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 Y 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. L The significant accounting policies of the District are described below: 1 f A. Financial Reporting Entity Y The District is a district corporation and political subdivision of the state of New York,distinct from the �l 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. I - 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. 1 B. Basis of Presentation I Fund Financial Statements 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. -6- I � �i i^ul SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) 1 ' 7` The District records its transactions in the fund types described below: ~I 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 determination of financial position and changes in financial position. The following are the District's governmental fund types: j 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. j Capital Projects Fund - is primarily used to account for the financial resources used for the acquisition,construction,renovation or major repair of capital facilities and other capital assets. Account Groups t 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: l 1_f Non-Current Governmental Assets Account Group — the non-current governmental assets account group is used to account for land,buildings,improvements and equipment owned by the } District. i 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 Measurement focus describes what type of information is reported,and is either the economic resources measurement focus or the current financial resources measurement focus. The economic resources measurement focus reports all assets,liabilities and deferred resources related to a given activity,as well i l as transactions of the period that affect net position.For example,all assets,whether financial (e.g.,cash and receivables) or capital (e.g.,property and equipment) and liabilities (including long-term debt and obligations)are reported.The current financial resources measurement focus reports more narrowly on assets,liabilities and deferred resources that are relevant to near-term liquidity,along with net changes J1 resulting from transactions of the period. Consequently, capital assets and the unmatured portion of long-term debt and certain other liabilities the District would not expect to liquidate currently with - expendable available financial resources (e.g., compensated absences for employees still in active service)would not be reported. Basis of accounting describes when changes are recognized,and is either the accrual basis of accounting i { or the modified accrual basis of accounting. The accrual basis of accounting recognizes changes in net position when the underlying event occurs,regardless of the timing of related cash flows.The modified accrual basis of accounting recognizes changes only at the point they affect near-term liquidity. i -7- i r_; J SOUTHOLD FIRE DISTRICT ` Notes to Financial Statements _ (Continued) The governmental funds financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when fi measurable and available.The District considers all revenues reported in the governmental funds to be Li recorded 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, claims and judgments, pension costs and compensated absences, which are recognized as F� expenditures to the extent they have matured.Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are _ reported as other financing sources. dp D. Real Property Taxes t Real property taxes are levied annually by the District no later than November 1St and become a lien on December 1St. The District's tax levy is collected by the Town of Southold and then remitted to the District from January to June. The County of Suffolk is responsible for all uncollected taxes. E. Interfund Transactions The operations of the District include transactions between funds.These transactions may be temporary in nature, such as with interfund borrowings.The District typically loans resources between funds for ! the purpose of providing cash flow.These interfund receivables and payables are expected to be repaid within one year. Permanent transfers of funds include transfers to provide financing for the acquisition, construction or renovation of major capital facilities or other capital assets. A detailed disclosure by individual fund for interfund receivables and payables,transfers in and transfers — out is provided subsequently in these Notes to Financial Statements. {— F. Use of Estimates The preparation of financial statements in conformity with a comprehensive basis of accounting other ti 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,liabilities,and disclosure of ^� contingencies at the date of the financial statements and the reported revenues and expenditures during f the reporting period. Accordingly, actual results could differ from those estimates. Estimates and assumptions are made in a variety of areas, including compensated absences, pension costs, and other postemployment benefits. G. Cash Cash consists of cash on hand,demand deposits and short-term investments with original maturities of i" three months or less from date of acquisition. Certain cash balances are restricted by various legal and contractual obligations, such as legal reserves and debt agreements. -` H. Restricted Length of Service Award Program Investments(LOSAP) I , The District sponsors the Southold Fire District Length of Service Award Program, a defined benefit pension plan,and has reported service award program assets.The underlying assets are reported at fair i market value based on quoted market prices and include cash,life insurance and fixed income annuities. -8- i-�r SOUTHOLD FIRE DISTRICT _ Notes to Financial Statements (Continued) l� The service award program assets are restricted for the purposes of providing benefits to the participants of the plan. Ll I. Receivables Receivables are shown net of an allowance for uncollectibles, if any. However, no allowance for uncollectibles has been provided since it is believed that such allowance would not be material. J. Prepaid Items 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. K. 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. I Donated assets are reported at acquisition value at the date of donation.The capital threshold,the dollar value above which asset acquisitions are added to the capital assets accounts,is$1,000 for all assets. L. Employee Benefits-Compensated Absences _ Compensated absences consist of unpaid accumulated sick leave. 1 ( L ! Sick leave eligibility and accumulation is specified in District policy. Upon retirement, resignation or death,employees may contractually receive a credit towards their health insurance obligation if over the age of 55 and 20 years of service to the District up to$6,000. The liability for compensated absences has been calculated using the vesting method and an accrual for that liability is included in the non-current governmental liabilities account group. The compensated j� 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 !7 absences for those employees that have obligated themselves to separate from service with the District j by December 31st. n M. Other Benefits Eligible District employees participate in the New York State and Local Employees'Retirement System. �—r Eligible volunteer firefighters and ambulance volunteers participate in the District sponsored Length of i Service Award Program. District employees may choose to participate in the District's elective deferral compensation plan established under Internal Revenue Code Section 457. -9- i SOUTHOLD FIRE DISTRICT _ Notes to Financial Statements (Continued) N. 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: 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. r Restricted-Consists of amounts that are subject to externally enforceable legal purpose restrictions 1 ' 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: `- Restricted for Debt Service Unexpended balances of proceeds of borrowings for capital projects; interest and earnings from 'J investing proceeds of obligations, and premium and accrued interest are recorded in the debt service fund and held until appropriated for debt payments.These restricted amount are accounted for in the general fund. Capital Reserve 1 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.These reserves are accounted for in the general C fund. Reserve for Service Award Program The District sponsors a defined benefit service award program for its volunteer EMS/Ambulance workers and is legally responsible for annual contributions to the program. The program is administered through a trust. Payments made from the program are made from general assets, which are subject to the claims of the District's creditors.The Trust does not meet the criteria of -1 GASB Statement No. 73, paragraph 4 because the assets are not protected from the District's creditors.The District reports the assets and restricted fund balance in the general fund. 7 Restricted for Unspent Bond Proceeds n Unspent bond proceeds are recorded as restricted fund balance because they are subject to external constraints contained in the bond agreement. These restricted funds are accounted for in the capital projects fund.In May 2021,the Board of Fire Commissioner approved a bond reduction plan in which the District will utilize $6,618 of unspent bond proceeds each year through 2032 towards the repayment of the outstanding bonds. 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 - 10- SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) fund balance represents the residual amount of fund balance. Assigned fund balance includes 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 should be used ` only to report a deficit fund balance resulting from overspending of available resources. �— 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 i approved by formal action of the Board of Fire Commissioners. The Board of Fire Commissioners shall retain the authority to assign fund balance. r� 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 to the extent appropriated by any Board of Fire Commissioners approved budget revision,then from the assigned fund balance to the extent appropriated by the Board of Fire Commissioners, and then from the unassigned fund balance. t V 2. STEWARDSHIP.COMPLIANCE AND ACCOUNTABILITY —� A. Budgets The District administration prepares a proposed budget for approval by the Board of Fire Commissioners for the general fund,the only fund with a legally adopted budget. Budgets are adopted annually on the ( modified accrual basis of accounting. 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 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 budget is as follows: Budget approved by the Board of Fire Commissioners $ 2,082,068 Fire police truck funded by unassigned fund balance 135,000 -� Radio equipment funded by unassigned fund balance 189,208 Debt service payments funded by unspent bond proceeds 6,618 Encumbrances from prior year 190,905 !r� Final Budget $ 2,603,799 I� -11- �—1 SOUTHOLD FIRE DISTRICT I Notes to Financial Statements (Continued) L 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 4 restricted, and do not represent expenditures or liabilities. These commitments will be honored in the L' subsequent period. Related expenditures are recognized at that time, as the liability is incurred or the commitment is paid. C. Over Expenditure of Certain Appropriations ( ? Certain general fund appropriations were over expended. These were in the following appropriation categories of the budget:state retirement system,social security,life insurance,and medical and accident insurance.The general fund budget in total was not over expended. `—j 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 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, 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 letters of credit on the District's behalf at year end. Ji 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. I ,I Investment pool: The District participates in the Cooperative Liquid Assets Securities System - New York (NYCLASS), a multi-municipal cooperative investment pool agreement pursuant to New York State General Municipal Law Article 3-A and 5-G, whereby it holds a portion of the investments in cooperation with other participants.The investments are highly liquid and are considered to be cash equivalents.All NYCLASS investment and collateral policies are in accordance with General Municipal Law,Sections 10 and 11. ,_j - 12 - I j SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) L Total investments of the cooperative at December 31, 2021 are $3,657,785,314, which consisted of $416,251,361 in repurchase agreements collateralized by a U.S. Government Agency Security, $167,059,309 in U.S. Treasury Notes, $2,018,413,278 in Treasury Bills, and $1,056,061,366 in J, collateralized bank deposits,with various interest rates and due dates. The following amounts are included as cash: Carrying Fund Amount _I General fund $ 304,350 General fund-Capital reserves 1,727,406 I $ 2,031,756 The above amounts represent the cost of the investment pool shares,which approximates market value. j The Lead Participant of NYCLASS is the Village of Potsdam.Additional information concerning NYCLASS, —1 including the annual report,can be found on its website at www.newyorkclass.org. 4. CAPITAL ASSETS Capital assets balances and activity for the year ended December 31,2021,were as follows: ! Balance Balance December 31, December 31, r—� 2020 Additions Deletions 2021 f i Land $ 715,686 $ $ $ 715,686 Buildings and improvements 5,268,622 33,265 5,301,887 ^! Equipment 4,630,903 137,285 (197,191) 4,570,997 $ 10,615,211 $ 170,550 $ (197,191) $ 10,588,570 i S. CAPITAL RESERVES i� Activity for the capital reserves during the year under audit is as follows: Building Equipment r Reserve Reserve Total Reserve Balance-Beginning of Year $ 33,057 $ 1,543,982 $ 1,577,039 n Additions to Reserve: Interest 13 608 621 ( Budgeted transfer to reserve 150,000 150,000 Reserve Balance-End of Year $ 33,070 $ 1,694,590 $ 1,727,660 -13 - � I SOUTHOLD FIRE DISTRICT 1 _ Notes to Financial Statements (Continued) 4� + 6. INTERFUND TRANSACTIONS —! Interfund balances at December 31,2021,are as follows: i L_1 Interfund Receivables Payable Transfers In Transfers Out i + General fund $ 3,577 $ $ 6,618 $ Capital projects fund 3,577 6,618 L $ 3,577 $ 3,577 $ 6,618 $ 6,618 i i i—1 The balance payable from the capital projects fund to the general fund represents$3,577 of interest earned ' on bond proceeds that is now being accounted for in the debt service reserve. The transfer to the general fund from the capital projects fund represents unspent bond proceeds that were used towards the repayment of the bonds,that was recently approved by the Board f Fire Commissioners in May 2021. I `J 7. LONG-TERM LIABILITIES YI A. Changes Long-term liability balances and activity for the year are summarized below: r^I Balance Balance Amounts j December 31, December 31, Due Within 2020 Additions Reductions 2021 One Year Long-term debt: Bonds payable $ 1,400,000 $ $ 100,000 $ 1,300,000 $ 100,000 f Other long-term liabilities Compensated absences 12,574 4,683 7,891 1 $ 1,412,574 $ - $ 104,683 $ 1,307,891 $ 100,000 I 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. B. Bonds Payable i � Bonds payable are comprised of the following: Outstanding at j Issue Final Interest December 31, —, Description Date Maturity Rate 2021 i Serial bond-improvements to Fire District facilities 12/1/2017 6/1/2032 2.236% $ 1,300,000 I ' --' - 14- ' I �' i i I SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) rl The following is a summary of debt service requirements for bonds payable: i I Year Ending December 31, Principal Interest Total i 2022 $ 100,000 $ 27,950 $ 127,950 2023 100,000 25,714 125,714 2024 100,000 23,478 123,478 2025 125,000 20,962 145,962 2026 125,000 18,167 143,167 2027-2031 625,000 48,913 673,913 2032 125,000 1,398 126,398 Total $ 1,300,000 $ 166,582 $ 1,466,582 J Interest on long-term debt for the year was$30,080. I 8. 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, I disability,withdrawal and death benefits to plan members and beneficiaries related to years of service I and final average salary. Provisions and Administration I —I 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 ERS is held in the New York State Common Retirement Fund (the Fund),which was established to hold all net assets 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 ERS.Once a public employer elects to participate in ERS, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot —i be diminished or impaired.Benefits can be changed for future members only by enactment of a State �i statute.The District also participates in the Public Employees'Group Life 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. � ^ 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 J before April 1, 2012, are required to contribute 3% of their salary throughout active membership. Those joining on or after April 1, 2012,are required to contribute between 3% and 6%dependent on their salary throughout active membership. Employers are required to contribute at an actuarially - 15 - l SOUTHOLD FIRE DISTRICT 1 Notes to Financial Statements (Continued) 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 151h 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 District's average contribution rate was 15.07%of covered payroll for the ERS' fiscal year ended March 31,2021. 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 �i resulting contributions paid in the current year and two preceding years were equal to 100 percent of the contributions required,and were as follows: ! 2021 2020 2019 District contributions paid $ 31,648 $ 31,314 $ 28,841 B. Pension Liabilities At December 31, 2021,the District reported the following liability for its proportionate share of the net pension liability for ERS in the non-current governmental liabilities account group. The net pension liability was measured as of March 31,2021.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 7 pension liabilitywas 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. . j Measurementdate March 31,2021 i District's proportionate share of the net pension liability $ 333 i District's portion of the Plan's total net pension liability 0.0003346% Change in proportion since the prior measurement date (0.0000071) 'T? 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 Li measurement date.The actuarial valuations used the following actuarial assumptions: Measurement date March 31,2021 t Actuarial valuation date April 1,2020 Inflation 2.7% Salary increases 4.4% I Investment rate of return(net of investment expense,including inflation) 5.9% Cost of living adjustments 1.4% Annuitant mortality rates are based on April 1, 2015 - March 31, 2020 system experience with adjustments for mortality improvements based on the Society of Actuaries' MP-2020. The actuarial assumptions were based on the results of an actuarial experience study for the period April 1, 2015 - �I March 31,2020. - 16- SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) For ERS, 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 weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of the arithmetic real rates of return for each major asset class are summarized as follows: r Long-term Target Expected Real Rate Allocation of Return I Measurement date March 31,2021 Asset type Domestic equity 32.00 % 4.05 International equity 15.00 % 6.30 Real estate 9.00 % 4.95 Private equities 10.00 % 6.75 % Alternative investments 10.00 % 3.63-5.95% Bonds and mortgages 23.00 % 0.00 % Cash 1.00 % 0.50 100.00 —� The real rates of return are net of long-term inflation assumption of 2.0%. Discount Rate The discount rate used to calculate the total pension liability was 5.9% (the discount rate used at the prior year's measurement date of March 31, 2020, was 6.8%). 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 �i 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 5.9% for ERS, 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 (4.9%) or 1 percentage point higher(6.9%)than the current rate: r� , j J r-"I J r -17- �I I J SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) F-1 I Current 1%Decrease Assumption 1%Increase 4.90% 5.90% 6.90% District's proportionate share of the net pension asset(liability) $ (92,476) $ (333) $ 84,644 Pension Plan Fiduciary Net Position The components of the current-year net pension liability of the employers, rounded to the nearest thousand,as of the measurement date were as follows: r, (Dollars in Thousands) Measurement date March 31,2021 a Employers'total pension liability $ (220,680,157) Plan fiduciary net position 220,580,583 r-- Employers'net pension liability $ (99,574) Ratio of plan fiduciary net position to the ! r employers'total pension liability 99.95% Prepayment to the Pension Plan 'i 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 15th to receive a 1% discount. The District paid the annual invoice in December, which resulted in a ( prepayment of$7,880 for the period January 1, 2022 through March 31, 2022.Employee contributions -' are remitted monthly. 9. LENGTH OF SERVICE AWARD PROGRAM(LOSAPI A. General Information I-, The District established a single employer defined benefit LOSAP for the active volunteer firefighters of, the Southold Fire Department.The program took effect on January 1,1993. The program was established pursuant to Article 11-A of the General Municipal Law. The program provides municipally-funded —f 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 ending on December 31,2021. tl � I 4 - 18- SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) B. Program Description —1 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 I to a service award after being credited with 5 years of firefighting services or upon attaining the program's entitlement age.The program's entitlement age is age 62 and completion of 1 year of service. In general,an active firefighter is credited with a year of firefighting service for each calendar year after j the establishment of the program which he or she accumulates fifty points. Points are granted for the �J 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 l firefighting service rendered prior to the establishment of the program. A participant becomes 100% j vested upon earning 5 years of service credit, attaining the entitlement age while an active member, becoming totally or permanently disabled, or upon death. Benefits are forfeited when a participant's membership is terminated and the participant has less than 5 years of'credited service. i Benefits A participant's benefit under the program is 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 r, when a participant reaches entitlement age. The program provides statutorily mandated death and disability benefits. —, Participants At the December 31, 2021 measurement date, the following participants were covered by the benefit terms: LJ Inactive participants: Currently receiving benefits 86 Entitled to but not yet receiving benefit payments 30 I -j Active participants 73 i I 189 Contributions J New York State General Municipal Law §219-d (1) requires the Board of Fire Commissioners to contribute an actuarially determined contribution on an annual basis. The actuarially determined contribution shall be appropriated annually by the Board of Fire Commissioners. U r� I l� I - 19- r-� I ^1 SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) Trust Assets Although assets have been accumulated in an irrevocable trust such that assets are dedicated to providing pensions to plan members in accordance with benefit terms, the trust assets are not legally protected from creditors of the District. As such,the trust assets do not meet the criteria in paragraph 4 of GASB Statement No.73. i C. 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. Irl i The governing board of the sponsor has retained and designated Hometown/Firefighters Services 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 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 February 8, 2005,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 BPAS Actuarial&Pension Services,LLC. Portions of the following information are derived from a report prepared by the actuary dated March 1J 2022 for the plan year ended December 31,2021. ii II 2� 1r_i 1 I � ^ -20- r-� ` SOUTHOLD FIRE DISTRICT j Notes to Financial Statements (Continued) D. Program Financial Condition Assets and Liabilities Actuarial Present Value of Benefits at December 31,2021 $ 5,211,819 Less: j Assets Available for Benefits %of total I Cash 1.55°/% $ 70,174 Annuities 54.72% 2,484,259 �1 Insurance contracts 43.73% 1,985,431 ,I Total Net Assets Available for Benefits 4,539,864 ^ t Total Unfunded Benefits 671,955 _- Less:Unfunded Liability for Prior Service (671,955) I Unfunded Normal Benefits $ 4 Prior Service Costs Prior service costs are being amortized over a range of 5 to 10 years at a discount rate of 5.00%. Receipts and Disbursements �i Plan Net Assets,Beginning of Year $ 4,296,387 Changes during the year +Plan contributions $ 367,000 +Investment income earned 112,330 +Proceed from life insurance 121,407 -Plan benefit withdrawals (351,060) -Administrative fees (6,200) 243,477 I Plan Net Assets,End of Year $ 4,539,864 Contributions Maximum amount of sponsors contribution recommended by actuary: $ 362,946 Minimum amount of sponsor's actual contribution: 299,069 Amount of sponsor's actual contribution: 367,000 t_= Sponsors contribution recommended by actuary for the 2022 plan year Maximum amount $ 316,299 Minimum amount 251,362 I -21- I � ' 1 SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) I �i Administration Fees Fees paid to designated program administrator $ 6,200 r- 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 5.00% ' 1 Mortality tables used for Withdrawal None Disability None Retirement RP-2000 Combined-Unisex i Death(actives) None Death(inactives) None Other None The actuarial valuation methodology used by the actuary to determine the sponsor's accrued benefits liability is the unit credit cost method. The assumptions used by the actuary to determine the sponsor's s accrued benefits liability and the actuarial present value of benefits are: Interest rate: 6.00%compounded annually Retirement: 1994 GAR-Male �Y The assumed rate of return on investment used in determining the sponsor's contributions was 5%and -i the mortality table used was the RP2000 Combined-Unisex for the years ended December 31,2021 and 2020, respectively. The interest rate and the mortality tables used in determining the accrued benefit liability change was 6% and the 1994 GAR-Male, for the years ended December 31, 2021 and 2020, respectively. 10. DEFERRED COMPENSATION PLAN 1 The District has established a deferred compensation plan in accordance with Internal Revenue Code§457 I for all employees. The District makes no contributions in this Plan. The amount deferred by eligible employees for the year ended December 31,2021 totaled$6,014. 11. COMMITMENTS AND CONTINGENCIES f A. Encumbrances I J All encumbrances are classified as either restricted or assigned fund balance. At December 31,2021,the District encumbered the following amounts: I ' , -22- h' SOUTHOLD FIRE DISTRICT Notes to Financial Statements (Continued) r Restricted General Fund Equipment and capital outlay $ 322,083 Assigned:Unappropriated General Fund Equipment and capital outlay 291,522 Fire protection 101,759 $ 715,364 r � I ` B. Risk Management 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. There have been no significant reductions in insurance coverage as compared to the prior year,and settled claims from these risks have L { not exceeded commercial insurance coverage for the past three years. a 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. 12. SPENDING LIMITATION The District did not exceed the statutory spending limitation imposed by New York State Law for the year ended December 31,2021,and the budget for the year ending December 31,2022. I . 13. SUBSEQUENT EVENT 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 except for the following: f Vehicle Purchase - On January 25,2022,the Board of Fire Commissioners approved the purchase of a new chiefs vehicle in 1 the amount of$55,440. Building Improvements I� ` On April 12, 2022, the Board of Fire Commissioners approved the installment of trim work on the building for a total cost of$60,528. I -23 - SOUTHOLD FIRE DISTRICT Schedule of Revenues,Expenditures and Changes in Fund Balance- -' Budget and Actual-General Fund-Operating For the Year Ended December 31,2021 Board- Final Budget Approved Final Variance with --- Budget Budget Actual Actual REVENUES Real property taxes $ 2,049,025 $ 2,049,025 $ 2,049,042 $ 17 Interest and earnings 5,000 5,000 765 (4,235) _ Rentals 28,043 28,043 28,534 491 Sale of equipment 25,000 25,000 Refund of prior year expenditures 3,184 3,184 Miscellaneous 53 53 i Total Revenues 2,082,068 2,082,068 2,106,578 24,510 'J OTHER FINANCING SOURCES Operating transfers in 6,618 6,618 - Total Revenues and Other Sources 2,082,068 2,088,686 2,113,196 $ 24,510 J, APPROPRIATED FUND BALANCE Prior years surplus 324,208 iPrior year's encumbrances 190,905 Total Appropriated Fund Balance 515,113 Total Revenues,Other Sources and Appropriated Fund Balance $ 2,082,068 $ 2,603,799 Final Budget I Variance with Year End Actual and Encumbrances Encumbrances EXPENDITURES Personal services $ 330,000 $ 330,000 250,534 $ $ 79,466 Equipment and capital outlay 255,000 660,113 217,946 291,522 150,645 Fire protection 660,500 749,500 592,199 101,759 55,542 State retirement system 31,000 31,000 31,648 (648) Service award program 420,000 420,000 367,000 53,000 J Social security 20,652 (20,652) Workers'compensation 70,000 70,000 57,111 12,889 Life insurance 12,000 33,000 47,221 (14,221) Medical and accident insurance 30,000 30,000 40,130 (10,130) Debt service-principal 93,382 100,000 100,000 - Debt service-interest 30,186 30,186 30,080 106 Total Expenditures 1,932,068 2,453,799 1,754,521 393,281 305,997 OTHER FINANCING USES Operating transfers out 150,000 150,000 150,000 Total Expenditures and Other Financing Uses $ 2,082,068 $ 2,603,799 1,904,521 $. 393,281 $ 305,997 _ Net Change in Fund Balance 208,675 Fund Balance-Beginning of Year 891,149 Fund Balance-End of Year $ 1,099,824 - Note to Supplementary Information Budget Basis of Accounting Budgets are adopted on the modified accrual basis of accounting. -- See Paragraph on Supplementary Information Included in Auditor's Report -24- f -i -� JAMES E.DANOWSKI,CPA �' -r VINCENT D.CULLEN,CPA JILL S.SANDERS,CPA CU.LLE-N & (1950-2013) '_J DONALD J.HOFFMANN,CPA o 1 ;;I ..% T ' o PETER F.RODRIGUEZ,CPA MICHAEL J.LEONE,CPA D! 4 V�OOV V LS lel, LLP (RET.) CHRISTOPHER V.REINO,CPA \ j I ALAN YU,CPA CERTIFIED PUB 1C ACCOUNTANTS 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 _ Southold Fire District Southold,New York We have audited,in accordance with auditing standards generally accepted in the United States of America and j 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 Southold Fire District (District), as of and for the year ended December 31,2021,and the related notes to financial statements,as listed in the table of IJ contents,which collectively comprise the District's basic financial statements and have issued our report thereon dated August 4, 2022.As described more fully in Note 1,the Southold Fire District has prepared these financial _ statements in accordance with 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. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Southold Fire District's internal control over financial reporting(internal control)as a basis for designing the audit procedures that are 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 Southold Fire District's internal control. _ Accordingly,we do not express an opinion on the effectiveness of the Southold Fire District's internal control. . I 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 a combination of deficiencies,in internal control, such that there is a reasonable possibility that a material misstatement of the District'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 Jimportant 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 r 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 identified. 1 1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060 - p - PHONE:631-473-3400•FAX:631-473-4863•WWW.CDLLP.NET -25 - f i I � 1 L_ i Report on Compliance and Other Matters 1 � As part of obtaining reasonable assurance about whether the Southold Fire District's financial statements are free from 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 statements. 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 Southold Fire District in a separate letter dated August 4,2022. LJ Purpose of this Report 1 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 J Standards in considering the District's internal control and compliance.Accordingly,this communication is not suitable for any other purpose. _1 August 4,2022 i 1 i it I � J l -26- - f