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Home My WebLink About2005 Cutchogue Fire District ANNUAL FINANCIAL REPORT UPDATE DOCUMENT December 31,2005 RECEI¥~D Town COMPANY A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS Board of Fire Commissioners Cutchogue Fire District 260 New Suffolk Road Cutchogue, New York 11935 We have reviewed the accompanying Annual Financial Report Update Document (AUD) of the Fire District Treasurer of Cntchogue Fire District for the year ended December 31,2005, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in this Annual Financial Report Update Document is the representation of management. The accompanying report has been prepared in conformity with accounting practices mandated by the State of New York in its Uniform System of Accounts for Fire Districts (State System) which, in certain instances, differs l¥om generally accepted accounting principles. Since the accompanying Annual Financial Report Update Document has been prepared in accordance with the State System, it is not intended to, and does not present the financial position or results of operations of the Cutchogue Fire District in conformity with generally accepted accounting principles. A review consists principally of inquires of District personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the Annual Financial Report Update Document taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying Annual Financial Report Update Document in order for it tO be in conformity with accounting practices mandated by the State of New York in its Uniform System of Accounts for Fire Districts. February 23, 2006 An Independent Member of the BDO Seidman Alliance All Numbers in This Report Have Been Rounded To The Nearest Dollar ANNUAL FINANCIAL REPORT UPDATE DOCUMENT For The FIRE DISTRICT of Cutchogue County of Suffolk For the Fiscal Year Ended 12/31/2005 AUTHORIZATION ARTICLE 3, SECTION 30 of the GENERAL MUNICPAL LAW: 1. ***Every Municipal Corporation *** shall annually make a report of its financial condition to the Comptroller. Such report shall be made by the Chief Fiscal Qfficer of such Municipal Corporation *** 5. All reports shall be certified by the officer making the same and shall be filed with the Comptroller within sixty days after the close of the fiscal year of such Municipal Corporation *** It shall be the duty of the incumbent officer at the time such reports are required to be filed with the Comptroller to file such report *** State of NEW YORK Office of The State Comptroller Division of Local Government Services and Economic Development Albany, New York 12236 See accountants' review report and notes to annual financial report update document Page I CERTIFICATION OF CHIEF FISCAL OFFICER I, Peter J. Zwedein , hereby certify that I am the Chief Fiscal Officer of the Fire Dist. of Cutchogue , and that the information provided in the annual financial report of the Fire Dist. of Cutchogue , for the fiscal year ended 12/31/2005 , is TRUE and correct to the best of my knowledge and belief. By entering the personal indentification number assigned by the Office of the State Comptroller to me as the Chief Fiscal Officer of the Fibre Dist. of Cutchog__u_e , and adopted by me as my signature for use in conjunction with the filing of the Fire Dist. of Cutchogue's~ annual financial report, I am evidencing my express intent to authenticate my certification of the Fire Dist. of Cutchogue's annual financial report for the fiscal year ended 12/31/2005 and filed by means of electronic data transmission. Name of Report Preparer if different than Chief Fiscal Officer (631) 734-6907 Telephone Number 03/27/2006 Date of Certification Peter J. Zwerlei,~ Treasurer Title 260 New Suffolk Road, Cutchogue, I' Official Address (6_~734-6907 Official Telephone Number Page 1 Municipality Code 471179002500 FIRE DISTRICT OF Cutchogue *** FINANCIAL SECTION *** Financial Information for the following funds and account groups are included in the Annual Financial Report flied by your government for the fiscal year ended 2004 and has been used by the OSC as the basis for preparing this update document for the fiscal year ended 2005: (A) GENERAL (K) NON-CURRENT GOV ASSETS (R) RESERVE (TA) AGENCY (W) NON-CURRENT GOV LIABILITY All amounts included in this update document for 2004 represent data filed by your government with OSC as reviewed and adjusted where necessary. *** SUPPLEMENTAL SECTION *** The Supplemental Section includes the following sections: 1) Statement of Indebtedness 2) Schedule of Securities for Collateralization 3) Schedule of Time Deposits and Investments 4) Investment Certification 5) Bank Reconciliation 6) Local Government Questionnaire All numbers in this report will be rounded to the nearest dollar. See accountants' review report and notes to annual financial report update document Page 2 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Balance Sheet Cash T~E~:~hi ,~ ..... ',' ~.[~',z~:...,.,.i ,.... TOT,AL ,~.~sets ~-~ ,' " ,*,'-., -.~ ,, .-' .,-~' '~J[~ .,.~. ~. '~. ' H ~' ~i~'. ~.'~¢ ¥' ~"~'., ,. ,'~ , ,~h ~,,~'~ ? ;7t.. ..... ,~ See accountants' review report and notes to annual financial report update document Page 3 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Balance Sheet Liabilities And Fund Equity Unreserved Fund Balance Appropriated 7,671 A910 TOTAEI;un~I E u ,~ .~ ~, , · ~.'.: · ~.,~ ~67~1.,,.~,,- ,,~, :,._.:~. ~ ~ ,. ~ ~ ......................................... . ............. . ............ .,.~:~.,_......,~ ........ .~, ............ .,. ................. _ ~.. ~ See accountants' review report and notes to annual financial report update document Page 4 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Results of Operation Detail Revenues And Other Sources Real Property Taxes 994,813 A1001 1,481,810 Interest And Earnings 1,209 A2401 2,983 Refunds of Prior Year's Expenditures A2.701 2,553 Unclassified (specify) 10,974 A2770 141 Additional Description Miscellaneous income TO,' ~n ' , ~.-, .... r-i. ' ' ~ ....... ~ '; See accountants' review report and notes to annual financial report update document Page 5 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Results of Operation Detail Expenditures And Other Uses Fire, Pers Serv 86,459 A34101 122,274 Fire, Equip & Cap Outlay 84,998 A34102 194,746 Fire, Contr Expend 340,544 A34104 342,750 State Retirement System Local Pension Fund, Empl Bnfls Social Security, Employer Cont Worker's Compensation, Empl Bnfls Disability Insurance, Empl Bnfts Hospital & Medical (dental) tns, Empl Bnft 0 A90108 118,937 A90258 8,049 A90308 A90408 A90558 A90608 8,806 121,655 18,822 26,738 619 4,082 Debt Principal, Serial Bonds 65,000 A97106 Debt Interest, Serial Sonde 2,178 A97107 Transfera, Other Funds 300,000 A99019 500,000 See accountants' review report and notes to annual financial report update document Page 6 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Changes in Fund Equity ANALYSIS OF CHANGES IN FUND EQUITY Fund Equity. Beginning of Year Prior Per[od Adj - Decrease In Fund Equity Restated Fund Equity - Beg of Year ADD - REVENUES AND OTHER SOURCES DEDUCT - EXPENDITURES AND OTHER USES Fund Equity-End of Year 27,684 27,684 1,006,995 1,006,165 28,514 A8021 A8015 A8022 A8029 28,514 20,843 7,671 1,487,487 1,340,492 t54,666 See accountants' review report and notes to annual financial report update document Page 7 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Budget Summary ~' T' ,~ .............. Estimated Revenues And Other Sources Est Rev - Real Property Taxes 1,481,800 A1049N Est Rev - Use of Money And Property 575 A2499N T~)TAl::Estlm~ted ~v~.,n~.d,~.~ ~z~:. ~ ~, .g,~,',: - .,'~ '~.~ %.~.;~, ~ ~,..-'-~'11482~375~;~, ~'~,~ ~" ~' ~ · .... ¢.:. ,,: ,'.,:,~'~ "'; '~:0 ~ T~TA[~Estmated~R~z~:s~nd~the~;~u~.`L :~?~ ~ `;~`~? ~ ~:`.148~ 3~$` ? ~:~ ~ ~ ..~',". ~ ,'.-..._.~.'..:,';:.?,',!.'.,' See accountants' review report and notes to annual financial report update document Page 8 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (A) GENERAL Budget Summary Appropriations And Other Uses App - Public Safety 1.297,475 A3999N App - Employee Benefits 166,900 A9199N TOTAEAppropr at'ns . ,.~ ~ ,~, · ..... ;..~.. ,~ e;~.~ , ~ ;~;- , ,1 ~,6,1~37{iz,, .~.~;.:; ~,.-. ........ ,' . , .~ .... 0, See accountants' review report and notes to annual financial report update document Page 9 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (K) NON-CURRENT GOV ASSETS Balance Sheet Assets Land 680,000 K101 Buildings 2,957,626 K102 Machinery & Equipment 3,553,258 K104 ., ~ .. .. ..~,~_~ .~..,..<~ ~, ,~,.... ~, . .....~ . ~: ~ . , ...... ..... ......... , ~,,~, ..~ ,,.,,,.~.. TOTALS: xed As~e~(~et)~.~, ...,~ ;,~ ',.~ ~,,~;, ,.,-,~=~,~ [~ ;~)~ ~.~';~-,7,~,,196 886 ,.,~7'~ ~.,~ -~'~., ,'~ ~.~ t'~ ,~:~Q- See accountants' review report and notes to annual financial report update document Page 10 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (K) NON-CURRENT GOV ASSETS Balance Sheet Liabilities And Fund Equity Total Non-Current Govt Assets 7,190,886 K159 T~ ~A b~rn vestm e _~t:,~-~ rrent'-~ ~.ero m ~t~t;~i~s'~t~'~~['',,~i~''+~ ~~: '".. '~' '.~., :.: · .~--'~-.,..~",:.-~:~:--e'~;:~-~-.~¥', :""'~.,~.-: .~.,'!~A:~."~~ '~': :'.'..~g?,'., .... , ?,..;~,~'. .'..~ .,'...-..'.'.~.'.'..., See accountants' review report and notes to annual financial report update document Page 11 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 Balance Sheet See accountants' review report and notes to annual financial report update document Page12 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 Balance Sheet See accountants' review report and notes to annual financial report update document Page 13 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (R) RESERVE Results of Operation Detail Revenues And Other Sources Interfund Transfers 300,000 R5031 500,000 See accountants' review report and notes to annual financial report update document Page 14 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (R) RESERVE Resulls of Operation Detail Expenditures And Other Uses Fire, Equipment Outlay Additional Description Ambulance III ~ ...... rrrr R34102 132,842 See accountants' review report and notes to annual financial report update document Page 15 nSC M unicipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (R) RESERVE Changes in Fund Equity ~ ...... ANALYSIS OF CHANGES IN FUND EQUITY Fund Equity - Beginning of Year Prior Period Adj - Dec To Fund Equity Restated Fund Equity - Beg of Year ADD ~ REVENUES AND OTHER SOURCES DEDUCT - EXPENDITURES AND OTHER USES Fund Equity - End of Year 1,068,417 R8021 1,383,486 R8015 54,446 1,068,417 R8022 1,329,040 315,069 516,558 132,812 1,383,486 R8029 1,712,786 See accountants' review report and notes to annual financial report update document Page 16 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (TA) AGENCY Balance Sheet Assets Service Award Program Assets 1,193,620 TA461 471,535 Additional Description see section comments. TOTAL nvestment$'.,." ' ,,, ' .: :...-'.~ ..:~..~;w~ ' :, ,~,'~ '.. '.,~;;~*~,':193620' .;, : :;'. ..471635 · ' ' ~ ' ,,.~'~, ';-:,' ;" ~;~,,', ;',,t'" :' ' ' ~,'"; .; .','"" '"..~',~,. ?'~ ¥;,"~,:., .~v,~.~'; ~,.:l~ '~ ,' ",,. ' ,~:'-?, '.~.,~"~ ' ~ ,-~,,~" '-,' ' . " ' .... ~ TOTA~' Assets ." ~'.'?.." ~. · . ~, ....' :[, .... ¥ ~'. ~ ~: ;' -' · , 93 620 - · . ,'. 471,S3S See accountants' review report and notes to annual financial report update document Page ~ 7 OSC Mumcipality Code 47~ 179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (TA) AGENCY Balance Sheet Liabilities And Fund Equity Service Awards 1,193,620 TA13 471,535 Additional Description see section comments. 1~ " ".'~'"".". ."~'.~,"' '. . ~.' !"'~..';.: .'," ~f"~' ":-~"',':':'A z~,::?~; ~ ~? .,~:.'~ .' .:~.~..'¢ .." ": · · :: ~';, .'. '' .. . :~ ~,,~.,,.,';.- ~, .~ ~ .-,.~ . ~ . ~ ~' , . .~,,, ~ .,.. .:~. .~ TOTAE~ab tes~n~ Fund.Equt~.~." ,,~'~,,,,,~;~ ~.,,.'~,~'~;.~., q . :t ~93;620 .~{... . , .~ .... ~-,a*~ _~3~_ See accountants' review report and notes to amnual financial report update document Page 18 OSC Municipality Code 471179002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (W) NON-CURRENT GOV LIABILITY Balance Sheet Assets TotaJ Non-Current Govt Liabilities 0 W129 TOTAL; Prov~smrj~To~B~Made, n:.Fu~ure=au~lge~j~,~'~' .. ,!~<~..'~,~,j:,~'.'~,i.~, ' 0., · ~ ' '..~ . 0 yA..;:~i~,:~_'~_~;'~¥,;~:~','.-.',i~,~:'?.'~:":~'!:~' .;~,~';C,~'?~",.-.'' '"~.~:=~"~;~ i:~,:,;~,~,~:=~,;~t[¢,~:~':-~,. ,,' :.. ..... ' ' · ,~'.. ;;' .v .~ .' ~ A ........ ....... ~.....~,., ............ ,~ .,, .~ ........ ,, .., ~ ............ ..~ ............ ..... See accountants' review report and notes to annual financial report update document Pa~e ~ 9 0$C ~uni¢ipality Co~e ~7J ~ 79002500 Cutchogue Annual Update Document For the Fiscal Year Ending 2005 (W) NON-CURRENT GOV LIABILITY Balance Sheet Liabilities And Fund Equity Bends Payable W628 TOTA~'.Bond And.Eon~erm Liabilities... j ~. ~....~.,.:,~ ........ ~ ~.~ ..~ ... .~ ~;~ ..... 0 ..... ,.~., ~.. ~ ...~ .... ., :. ~0 TOTALEa~ teaAndFuedEqut¥~ · ~.". .... '. ~.~' ...... '~,~,-~.: ~' · ' .~.,~.'- ~ .' ..' .... · ......... ,' -.%-.'0 See accountants' review report and notes to annual financial report update document Page 20 OSC Municipality Code 471179002500 Cutchogue Financial Comments For the Fiscal Year Ending 2005 (A) GENERAL ~lAdiustment Reason Account Code A8015 Last year's AUD was prepared incorrectly in that the the ending Fund Equity did not equal ending cash balance. (R) RESERVE Adjustment Reason Account Code R8015 Last year's AUD was prepared incorrectly in that the the ending Fund Equity did not equal ending cash balance. (TA) AGENCY Section Comment Service Awards Program Assets, Edp Code TA461 &TA13: Prior year's reports only reported contributions and not withdrawals. The amount reported at the end of 2005 represents the plans actual net value. The 2004 amount should be $552,389.76. See accountants' review report and notes to annual financial report update document Page 21 OSC Municipality Code 47117! Cutchogue Statement of Indebtedness For the Fiscal Year Ending 2005 See accountants' review report and notes to annual financial report update document Page 22 Cutchogue Maturity Schedule For the Fiscal Year Ending 2005 See accountants' review report and notes to annual financial report update document Page 23 Cutchogue Schedule of Securities for Collateralization For the Fiscal Year Ending 2005 General Municipal Law, Section 10 as amended by chapter 708 Laws of 1992 lists the types of securities which may be pledged for collateralization. Please click in the response box next to the type(s) of securities used by banks as collateral for your deposits. Yes 1. Yes 2. Yes 3. Yes 4. Yes 5. Yes 6. Obligations issued by the United States of America, an agency thereof or a United States sponsored corporation or obligations fully insured or guaranteed as to the payment of principal and interest by the United States of America, an agency thereof or a United States government sponsored corporation. Obligations issued or fully guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank and the African Development Obligations partially insured or fully guaranteed by any agency of the United States of America, at a proportion of the market value of the obligation that represents the amount of the insurance or Obligations issued or fully insured or guaranteed by this state, obligations by a municipal corporation, school district or district corporation of this state or obligations of any public benefit corporation which under a specific state statute may be accepted as security for deposit of public moneys. Obligations issued by states (other than this state) of the United States rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. Obligations of Puerto Rico rated in one of three highest rating categories by at least one nationally recognized statistical rating organization. Yes Yes Yes Yes Yes 9. 10. 11. 12. Obligations of counties, cities, and other governmental entities of another state having the power to levy taxes that are backed by the full faith and credit of such governmental entity and rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. Obligations of domestic corporations rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization. Any mortgage related securities, as defined in the Securities Exchange Act of 1934, as amended, which may be purchased by banks under the limitations established by federal bank regulatory agencies. Commercial paper and bankers' acceptances issued by a bank (other than the bank with which the money is being deposited or invested) rated in the highest shod-term category by at least one nationally recognized statistical rating organization and having maturities of not longer than sixty days from the date they are pledged. Zero-coupon obligations of the United States government marketed as "Treasury Strips". Letters of Credit. 13. Surety bonds. See accountants' review report and notes to annual financial report update document Page 24 OSC Municipality Code 471179002500 Cutchogue Schedule of Time Deposits and investments For the Fiscal Year Ending 2005 CASH: On Hand Demand Deposits Time Deposits Total COLLATERAL: - FDIC Insurance Collateralized with securities held in possession of municipality or its agent Total EDP Code 9Z2001 9Z2011 9Z2021 9Z2014 9Z2014A Amount $158,247.00 $1,803,076.00 $1,961,323.00 $100,000.00 $1,967,981.00 $2~067,981.00 iNVESTMENTS: - Securities (450) Book Value (cost) Market Value at Balance Sheet Date Collateralized with securities held in possession of municipality or its agent 9Z4501 9Z4502 9Z4504A - Repurchase Agreements (451) Book Value (cost) Market Value at Balance Sheet Date Collateralized with securities held in possession of municipality or its agent 9Z4511 9Z4512 9Z4514A See accountants' review report and notes to annual financial report update document Page 25 OSC Municipality Code 471179002500 Cutchogue Investment Certification For the Fiscal Year Ending 2005 DEFINITIONS: Repurchase Agreement - A generic term for an agreement in which a government entity (buyer-lender) transfers cash to a broker-dealer or financial institution (seller-borrower); the broker-dealer or financial institution transfers securities to the entity and promises to repay the cash plus interest in exchange for the same securities or for different securities. Reverse Repurchase Agreement - An agreement in which a broker-dealer or financial institution (buyer-lender) transfers cash to a government entity (seller-borrower); the entity transfers securities to the broker-dealer of financial institution and promises ro repay the cash plus interest in exchange for the same securities or different securities. 1) Has your Local Government adopted an investment policy as required by General Municipal Law, Section 39? 2) The following investments are permitted by your investment policy. * Obligations of the UNITED STATES * Obligations of the U.S. Government Agencies, guaranteed by the UNITED STATES Government * Obligations of the STATE of NEW YORK * Obligations of other NEW YORK STATE Local Governments * Other 3) Do you engage in reverse repurchase agreements? 4) Are Repurchase Agreements authorized by your investment policy? RESPONSE No No Name: Peter J. Zwerlein Title: Treasurer Phone Number: (631) 734-6907 See accountants~ review report and notes to annual financial report update document Page 26 ;)SC Municipality Code 471179002500 Cutchogue Bank Reconciliation For the Fiscal Year Ending 2005 Include All Checking, Savings and C.D. Accounts Bank Account Number 1124002534 Gnl Fund _1. 124002591 Equip, R,' 1124002609 Gnl Fund 1124002617 Bldg. Rs~ 1130031956 Bldg. Rs~ 1~3_00~3_1964 _B_ldg. Rs~ 1130031972 Bldg. Rs~ 1130032012 Bldg. Rs~ 1130032202 Bldg. R_S/ 1130033143 Gnl Fund Add: Less: Adjusted Bank Deposit Outstanding Bank Balance In Transit Checks Balance $12,919 $30,000 $93,871 ($50,952) $81,490 $0 $0 $81,490 $55,618 $0 $30,000 $25,618 $8,220 $0 $0 $8,220 $303,463 $0 $0 $303,463 $600,424 $0 $0 $600,424 $102,666 $0 $0 $102,666 $116,523 $0 $0 $116,523 $500,000 $o ~;_o ....... $500,000 $18o,ooo _ $o $~_o $18o,ooo Total Adjusted Bank Balance $1,867,452 ~etty Cash $.00 Adjustments $.00 Total Cash 9ZCASH $1,867,452 Total Cash Balance All Funds 9ZCASHB * Must be equal See accountants' review report and notes to annual financial report update document Page 27 OSC Municipality Code 471179002500 Cutchogue Local Government Questionnaire For the Fiscal Year Ending 2005 1) Doesyour municipality have a written procurement policy? 2) Have the financial statements for your municipality been independently audited? If not, are you planning on having an audit conducted? 3) Does your local government participate in an insurance pool with other local governments? 4) Does your local government participate in an investment pool with other local governments? 5) Does your municipality have a Length of Service Award Program (LOSAP) for volunteer firefighters? 6) Does your municipality have a Capital Plan? 7) Has your municipality prepared and documented a risk assessment plan? If yes, has your municipality used the results to design the system of internal controls? 8) Have you had a change in chief executive or chief fiscal officer during the last year? 9) Does your municipality have access to the internet? Does your municipality have an official E-mail address? If yes, what is it? Does the chief fiscal officer have a separate E-mail address? If yes, what is it? Do you have a web site? If yes, what is the official address of the web site for your municipality? Response No No No No No Yes No Yes Yes Yes cutfd@optonline.net Yes cutfdtreas@optonline.net Yes www.cutchoguefire_deptorg See accountants' review report and notes to annual financial report update document Page 28 OSC Municipality Code 471179002500 Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of siunificant accountin~ oolicies: Cutchogue Fire District (the "District") is a governmental entity that provides fire protection to the local community. Financial reoortiw, entity: The District is governed by laws of the State of New York. The Board of Fire Commissioners is the legislative body responsible for the overall operation of the District. All activities and functions performed for the District are its direct responsibility. The Treasurer serves as chief fiscal officer of the District. Basis of oresentation: The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The following fund types are used: Governmental: General Fund The General Fund is the principal operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Reserve Funds The District maintains two Reserve Funds as follows: E~luioment Reserve Thc Equipment Reserve is used to account for and report financial resources to be used for the acquisition of equipment needed by the District including radios and pagers. Buildin~ Reserve The Building Reserve is used to account for and report financial resources to be used for the acquisition, construction, or renovation of major capital facilities. See accountants' review report COMPANY Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting oolicies (continued): Fiduciary Fund Fiduciary Funds are used to account for assets held by the District in a trustee or custodial capacity. The District utilizes the following fund: Trust and Agency Fund The Trust and Agency Fund is used to account for and report assets held by the District in the capacity of trustee, custodian or agent for individuals. Agency Funds are custodial in nature and do not involve measurement of results of operations. Basis of accounting: The accompanying Annual Financial Report Update Document has been prepared on the single entry cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Under that basis, the only asset recognized is cash, and no liabilities are recognized. All transactions are recognized as either cash receipts or cash disbursements. Non-cash transactions are not recognized in the Annual Financial Report Update Document. Real orooertv taxes: Real property taxes are levied annually by the Board of Fire Commissioners. Budgetary data: The District prepares an operating budget for the General Fund each year. The budget is adopted by the Board of Fire Commissioners as its final budget for the coming year. The budget is not subject to referendum. All budget appropriations lapse at the end of the year. Cash and cash eouivalents: Cash and cash equivalents include temporary investments in certificates of deposits, all of which are scheduled to mature within the next fiscal year. At December 31, 2005, all items classified as cash and cash equivalents were fully covered by Federal Deposit Insurance Corporation (FDIC) or by third party collateral held by the District's custodial agent in the District's name. Periodically, the District determines that the collateral or underlying securities have an adequate market value and have been segregated. See accountants' review report -30- Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting oolicies (continued): Investments: The District has not adopted an investment policy as required by General Municipal Law of New York State, Section 39. Pension Plan: Plan descriotion: The District participates in the New York State and Local Employees' Retirement System (ERS). This is a cost sharing multiple employer retirement system. The System provides retirement benefits as well as death and disability benefits. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and administrative head of the System. The Comptroller shall adopt and may amend rules and regulations for the administration and transaction of the business of the System and for the custody and control of their funds. The System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the New York State and Local Retirement Systems, 110 State Street, Albany, New York 12244. Funding oolicv: The System is noncontributory except for employees who joined the New York State and Local Employees' Retirement System after July 27, 1976 who contribute 3% of their salary for the first ten years of membership. Under the authority of the NYSRSSL, the Comptroller annually certifies the rate expressed used in computing the employers' contributions. The required contributions for the current year and two preceding years were as follows: Year Ending December 31, Amount 20O5 $8,806 2004 $3,732 2003 $1,960 The District's contributions made to the System were equal to 100% of the contributions required. See accountants' review report -31- ~COIvlPANY Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Se Leto, th of Service Award Program: On March 1, 1993 the District approved the adoption of the Length of Service Award Program for volunteer firefighters, to be effective the same date. This program is authorized under Article 11-A of the General Municipal Law of New York State. The Program provides District funded pension like benefits to facilitate the recruitment and retention of volunteer ftrefighters. Benefits under the Program are funded by a fixed contribution to the Program made by the District each time a volunteer firefighter earns credit for a year of service after adoption of the Program. During the year ended December 31, 2005, the District's contributions to the Length of Service Award Program totaled $121,655, which are reported in the General Fund. The assets held by the Program Administrator for the District for the year ended December 31, 2005 were $471,535. Unexoended General Fund cash: At December 31, 2005, the unexpended General Fund cash balance was $154,666. In conformance with General Municipal Law, approximately $6,000 will be retained to pay for expenditures incurred in 2005. The remaining $148,666 will be transferred to the Reserve Funds. Litigation: The District (in common with other municipalities) is subject to one action/claim arising from the normal conduct of its affairs. The ultimate outcome of this matter cannot be determined at this time as it is presently in the discovery phase. See accountants' review report -32- ~COMPANY