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HomeMy WebLinkAbout2014ORIENT FIRE DISTRICT FINANCIAL STATEMENTS December 31, 2014 ORIENT FIRE DISTRICT TABLE OF CONTENTS December 31, 2014 Page INDEPENDENT AUDITOR'S REPORT.........................................................................................1-2 GENERAL PURPOSE FINANCIAL STATEMENTS Balance Sheet - Governmental Funds (Regulatory Basis).............................................................3 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds (Regulatory Basis) ................................................ 4-5 Statement of Fiduciary Net Assets — Agency Funds (Regulatory Basis) ............................... 6 Budgetary Comparison Schedule — General Fund (Regulatory Basis) ................................. 7 Notes to Financial Statement...................................................................................................... 8-15 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 ............ 16-17 Georee R. RehnCertified Public Accountant Board of Fire Commissioners Orient Fire District 23300 Main Road Orient, NY 11957 286 Main Street • East Setauket • New York 11733 (631) 751-3886 • Fax (631) 751-2740 INDEPENDENT AUDITOR'S REPORT I have audited the accompanying financial statements of the Orient Fire District as of and for the year ended December 31, 2014, as listed in the table of contents and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of this financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on this financial statement based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those �i standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement. F - An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected . depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to entity's preparation and I fair presentation of the financial statements in order to design audit procedures that are appropriate in the l circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my. audit opinion. Opinion In my opinion, the financial statements and budgetary comparison schedule referred to above present fairly, in all material respects, the assets, liabilities and fund balances of the Orient Fire District as of December 31, 2014, and the revenues it received and expenditures it made for the year then ended in conformity with the basis of accounting described in Note 1. I I J L I In accordance with Government Auditing Standards, I have also issued my report dated May 15, 2015, on my consideration of the Orient Fire District's internal control over financial reporting and on my test of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. F The purpose of that report is to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of my audit. This i report is intended solely for the information and use of the Board of Fire Commissioners, management, others within the Organization and the New York State Office of the State Comptroller and is not intended { to be and should not be used by anyone other than these specified parties. May 15, 2015 Setauket, N.Y. 2 geO/LC,e aJL. uD 0 LPi" Certified Public Accountant i ORIENT FIRE DISTRICT, NEW YORK BALANCE SHEET - GOVERNMENTAL FUNDS ( REGULATORY BASIS) i December 31, 2014 I - 'Truck capital _ General Reserve Improvement i Fund Fund Fund Total - Assets: Cash $45,668 $227,491 $32,454 $305,613 -' Total Assets $45,668 $227,491 $32,454 $305,613 } Liability and fund balances: Liability: Accrued expenses $918 $ -- $ -- $918 _ Fund balances: Restricted for capital purposes -- 227,491 32,454 259,945 Unassigned 44,750 -- -- 44,750 f Total fund balances 443750 227,491 32,454 304,695 r Total liability and fund balances $45,668 $227,491 $32,454 $305,613 3 See notes to financial statements ORIENT FIRE DISTRICT, NEW YORK STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS (REGULATORY BASIS) For the Year Ended December 31, 2014 Truck capital General Reserve Improve - Fund Fund ment Fund Total Revenues Real property taxes $608,296 $ -- $ -- $608,296 Interest and earnings 114 462 98 674 Rental income 50,761 -- -- 50,761 Rental income 20,000 -- -- 20,000 Refund of prior year's expenditures 1,528 -- -- 1,528 Total revenues 680,699 462 98 681,259 Expenditures: Personal services 26,860 -- -- 26,860 Equipment and capital outlay 35,200 -- -- 35,200 Contractual expenditures 380,766 -- -- 380,766 Local service award pension 135,000 -- -- 135,000 Social security 2,055 -- -- 2,055 Workers compensation and employee benefits 17,035 -- -- 17,035 Total expenditures 596,916 -- 0 596,916 Excess of revenues over expenditures 83,783 462 98 84,343 4 See notes to financial statements ORIENT FIRE DISTRICT, NEW YORK STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS (REGULATORY BASIS) For the Year Ended December 31, 2014 Truck Capital General Reserve Improvement Fund Fund Fund Total Other financing sources (uses): Transfers in -- 105,755 -- 105,755 Transfers out (40,000) -- (65,755) (105,755) Total other financing sources (uses) (40,000) 105,755 (65,755) -- Net changes in fund balances 43,783 106,217 (65,657) 84,343 Fund balance, beginning of year 967 121,274 98,111 220,352 Fund balance, end of year $44,750 $227,491 $32,454 $304,695 5 See notes to financial statements ORIENT FIRE DISTRICT, NEW YORK STATEMENT OF FIDUCIARY NET ASSETS - AGENCY FUND (REGULATORY BASIS) December 31, 201-4 Agency Fund Assets: Service award program assets $1,210,509 Total assets $1,210,509 Liabilities: Service award program liability $1,210,509 Total liabilities $1,210,509 6 See notes to financial statements ORIENT FIRE DISTRICT, NEW YORK BUDGETARY COMPARISON SCHEDULE GENERAL FUND (REGULATORY BASIS) For the Year Ended December 31, 2014 Variance With Budget Budget Actual Unfavorable Revenues - Real property taxes $608,295 $608,296 $1 Interest and earnings 250 114 (136) Rental income 49,000 50,761 1,761 ,- Refund of prior year's expenditures -- 1,528 1,528 Refund of prior year's expenditures -- 20,000 20,000 Amounts available for appropriation 657,545 680,699 23,154 �I Expenditures Personal services 37,000 26,860 10,140 Equipment and capital outlay 67,000 35,200 31,800 Contractual expenditures 353,795 380,766 (26,971) Local service award pension 135,000 135,000 -- NYS Retirement 100 -- 100 '• Social security 2,900 2,055 845 Workers compensation and employee benefits 16,750 17,035 (285) Total expenditures 612,545 596,916 15,629 ,- Other financing sources (uses): Transfers out 45,000 40,000 5,000 Total other financing sources (uses) 45,000 40,000 5,000 Excess of revenues over expenditures and other uses 7 See notes to financial statements $43,783 ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENTS December 31, 2014 Note 1— Summary of Significant Accounting Policies: The financial statements of the Orient Fire District (the "District"), as of and for the year ended December 31, 2014 have been prepared in conformity with modified accrual regulatory basis of accounting as prescribe by the State Comptroller's Office, which is a comprehensive basis of accounting other than United States generally accepted accounting principles. Financial reporting entity: The District is a governmental entity that provides fire protection to the local community. The District receives most of its funding from property taxes. 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 presentation: The fund financial statements provide information about the District's funds, including fiduciary funds. 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 —ry 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. Debt service is also accounted for in the General Fund. Capital Improvement Fund The Capital Improvement Fund is used to account for and report financial resources to be used for the acquisition, construction, or renovation of major capital facilities. Truck Reserve Fund The Truck Reserve Fund is used to account for and report financial resources to be used for the acquisition of all large equipment. 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: ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENTS December 31, 2014 Azency Fund The 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. I Basis of accounting: The accompanying governmental fund financial statements are reported on the modified accrual regulatory basis of accounting using the current financial resources measurement focus. Revenues are recognized when measurable and available. "Available" means collectible within the current period or within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. The exception to this general rule is that principal and interest on general obligation long-term debt, if any, is recognized when due. Cash and cash equivalents: Cash and cash equivalents include demand deposits and temporary investments with original maturities of three months or less from date of acquisition. Interfund transfers: The operations of the District give rise to certain transactions between funds, including transfers of expenditures and revenues to provide services and construct assets. This is either by budget, Board resolution or permissive referendum. Fund balance — reserves and designations: Portions of fund balance are reserved or designated to either satisfy legal restrictions or to plan for future expenditures. The following is a description of the reserves utilized 'by the District: Reserve for Capital Improvements— used for the acquisition construction or renovation of major capital facilities. Reserve for Truck — used for the acquisition of large equipment. Real property taxes: All real property assessments are made by the Town of Southold. Real property tax payments are due in two equal installments; the first half payable on December 1 (lien and levy date) preceding the year for which the same is levied and the second half payable May 10, with the first half payable without penalty to January 10 and the second half payable without penalty to May 31. After May 31, all taxes must be paid to the Suffolk County Treasurer with a 5% penalty charge and interest at the rate of I% per month for February 1. E ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENTS December 31, 2014 The Town of Southold Receiver of Taxes collects all real estate taxes for the District. The Town of Southold Receiver of Taxes distributes the tax collections to the District. All payments made to the District are made in the year for which the tax has been levied. The Town of Southold Receiver of Taxes turns over uncollected items to the Suffolk County Treasurer who continues the collection of these items. Responsibility for the collection of unpaid taxes rests with Suffolk County. Budgetary data: The District prepares an operating budget for the General Fund each year. The budget is adopted by the Board of Fire Commissioners in the prior year for the coming year. The budget is not subject to referendum. All budget appropriations lapse at the end of the year. Use of estimates: The preparation of financial statements in conformity with the modified accrual regulatory basis of accounting requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Note 2 - Deposits with financial institutions and investments: The District's investment polices 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 special time deposit " accounts, certificates of deposit, and obligations of the United States of America, obligations guaranteed by agencies of the United States of America where the payment and interest are guaranteed by the United States of America, and obligations of the State of New York. Collateral is required for demand and time deposits. Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. GASB directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance and the deposits are either: 1. Insured by FDIC insurance 2. Collateralized by securities held by the pledging financial institution's trust department or agent but not in the District's name. 3. Collateralized by securities held by the pledging financial institution but not in the District's name. 4. Uncollateralized. 10 f I ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2014 The District's deposits held by the banks are categorized, based on the above criteria, as follows: Category Amount 1 $500,000 2 -- 3 -- 4 -- ' Total $500.000 Note 3 - Length of Service Awards Program - LOSAP The Orient Fire District financial statements are for the year ended December 31, 2014. The information contained in this note is based on information for the Length of Service Awards Program for the plan year ending on December 31, 2014. The Orient Fire District established a defined benefit LOSAP for the active volunteer firefighters of the Orient Fire Department. The program took effect on January 1, 1995. The program was established pursuant to Article 11-A of the General Municipal Law. The program provides municipally -funded pension -like benefits to facilitate the recruitment and retention of active volunteer firefighters. The Orient Fire District is the sponsor of the program. Program Description Participation, vesting and service credit Active volunteer firefighters who have reached the age of 18 and who have completed 1 year of firefighting service are eligible to participate in the program. Participants acquire a nonforfeitable right to a service award after being credited with 5 years of firefighting service or upon attaining the program's entitlement age. The program's entitlement age is age 65. In general, an active volunteer firefighter is credited with a year of firefighting service for each calendar year after the establishment of the program in which he or she accumulates fifty points. Points are granted for the performance of certain activities in accordance with a system established by the sponsor on the basis of a statutory list of activities and point values. A participant may also receive credit for 5 years of firefighting service rendered prior to the establishment of the program. 11 r -- ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENT r ? DECEMBER 31, 2014 1 Benefits A participant's benefit under the program is a life annuity with ten years certain equal to $20.00 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 thirty. Benefits are not payable until entitlement age. On and after that date, except in the case of disability or death, benefits are payable when a participant reaches entitlement age. The program provides statutorily mandated death and disability benefits. Fiduciary Investment and Control Service credit is determined by the governing board of the sponsor, based on information certified to the governing board by each fire company having members who participate in the program. Each fire company must maintain all required records on forms prescribed by the governing board. The governing board of the sponsor has retained and designated Wachovia Securities to assist in the administration of the program. The designated program administrator's functions include record keeping and payment calculation and verification. Disbursements of program assets for the payment of benefits or administrative expenses must be approved by the Orient Fire District Board of Commissioners. 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 January 1, 1995, and the trustee is Orient Fire District Commissioners. Authority to invest program assets is vested in Orient Fire District Commissioners. Program assets are invested in accordance with a statutory "prudent person" rule. The sponsor is required to retain an actuary to determine the amount of the sponsor's contributions to the plan. The actuary retained by the sponsor for this purpose is Penflex. Portions of the following information are derived from a report prepared by the actuary dated April 13, 2015. L: 12 ORIENT FIRE DISTRICT, NEW YORK . NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2014 Program Financial Condition Assets and Liabilities Actuarial Present Value of Benefits at December 31, 2014 Less: Assets Available for Benefits % of total Cash & cash equivalents 32.74% Fixed income 9.48% Mutual funds 57,78% 100% Less: Liabilities Total Net Assets Available for Benefits Total Unfunded Benefits Less: Unfunded Liability for Prior Service Unfunded Normal benefits $ 396,335 114,710 699,464 1,210,509 Prior Service Costs Prior service costs are being amortized over 15 years at a discount rate of 5.5%. 13 $1,728,915 1,210,509 518,406 492,410 $ 2 L_4 ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2014 Receipts and Disbursements Plan Net Assets, beginning of year $ 1,085,820 Changes during the year: + Plan contributions $135,000 + Changes in fair market value of investments 74,097 - Plan Benefit Withdrawals (84,408) 124,689 Plan Net Assets, end of year Contributions Amount of sponsor's contribution recommended by actuary: $106,101 Amount of sponsor's actual contribution: $135,000 Administration Fees Fees paid to trustee: $ -- Fees paid for investment management (if separate from fee paid to trustee): -- Fees paid to actuary and program administrator -- Other administration fees -- Funding Methodology and Actuarial Assumptions Normal Costs The actuarial valuation methodology used by the actuary to determine the sponsor's contribution is the entry age normal -frozen initial liability 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 5.5% Mortality Tables used for Withdrawal Disability Retirement Death (Actives) Death (In -actives) 1983 Unisex Mortality Table 1983 Unisex Mortality Table 1983 Unisex Mortality Table 1983 Unisex Mortality Table 1983 Unisex Mortality Table 14 ORIENT FIRE DISTRICT, NEW YORK NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2014 NOTE 4 — EVALUATION OF SUBSEQUENT EVENTS The organization has evaluated subsequent events through May 15, 2015, the date which the financial statements were available to be issued. 15 GR Georo,e R. Rehia,,ertified Public Accountant 286 Main Street • East Setauket • New York 11733 (631) 751-3886 • Fax (631) 751-2740 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH P GOVERNMENT A UDITING STANDARDS Board of Fire Commissioners Orient Fire District 23300 Main Road Orient, NY 11957 I have audited the financial statements of Orient Fire District for the year ended December 31, 2014, and have issued my report thereon dated May 15, 2015. I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing my audit, I considered the District's internal control over financial reporting as a basis for designing my auditing procedures , for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing j an opinion on the effectiveness of the District's internal control over financial reporting. l Accordingly, I do not express an opinion on the effectiveness of the districts internal control over financial reporting. I A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the ability to initiate, authorize, record, process or report financial data reliably in accordance with generally accepted accounting principles'such that there is more than a remote likelihood that a misstatement of the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. 16 A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of I a financial statement will not be prevented or detected by the District's internal control. My consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I consider to be material weakness, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether The District's financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of this audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instance of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and _use of Board of Fire Commissioners of Orient Fire District and is not intended to be and should not be used by .anyone other than these specific parties. May 15, 2015 Setauket, New York ,q ea r a. Rim.. Certified Public Accountant 17