HomeMy WebLinkAbout2015 Audit ,
OFFICE OF THE NEW YORK STATE COMPTROLLER
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Cash Reserves
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Repoft of Examination
Period Covered:
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January 1, 2014 - Fehr,-- February 28, 2015
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Table of Contents
Page
AUTHORITY LETTER 1
EXECUTIVE SUMMARY 2
INTRODUCTION 4
Background 4
Objectives 4
Scope and Methodology 4
Comments of District Officials and Corrective Action 5
CASH RESERVES 6
Recommendations 6
CREDIT CARDS 8
Audit of Claims 8
Travel and Conference Expenses 9
Meals and Refreshments 12
Recommendations 13
APPENDIX A Response From District Officials 14
APPENDIX B Audit Methodology and Standards 17
APPENDIX C How to Obtain Additional Copies of the Report 19
APPENDIX D Local Regional Office Listing 20
los r: ,t
State of New York
Office of the State Comptroller
Division of Local Government
and School Accountability
March 2016
Dear Fire District Officials:
A top priority of the Office of the State Comptroller is to help local government officials manage
government resources efficiently and effectively and, by so doing, provide accountability for tax
dollars spent to support government operations. The Comptroller oversees the fiscal affairs of local
governments statewide, as well as compliance with relevant statutes and observance of good business
practices.This fiscal oversight is accomplished,in part,through our audits,which identify opportunities
for improving operations and Board of Fire Commissioners governance. Audits also can identify
strategies to reduce costs and to strengthen controls intended to safeguard local government assets.
Following is a report of our audit of the Orient Fire District, entitled Cash Reserves and Credit Cards.
This audit was conducted pursuant to Article V, Section 1 of the State Constitution and the State
Comptroller's authority as set forth in Article 3 of the General Municipal Law.
This audit's results and recommendations are resources for local government officials to use in
effectively managing operations and in meeting the expectations of their constituents. If you have
questions about this report,please feel free to contact the local regional office for your county,as listed
at the end of this report.
Respectfully submitted,
Office of the State Comptroller
Division of Local Government
and School Accountability
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 1
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The Orient Fire District (District) is a district corporation of the State, distinct and separate from the
Town of Southold, in Suffolk County (County). The District's expenditures for 2014 were $636,916,
and budgeted appropriations for 2015 were $669,295, funded primarily with real property taxes.
The District covers approximately five square miles and serves approximately 900 residents. The
Board of Fire Commissioners (Board) is composed of five elected members and is responsible for the
District's overall financial management and for safeguarding District resources. The Board appoints
a Treasurer and a Secretary. The Treasurer acts as the District's chief fiscal officer and is responsible
for the receipt and custody of District funds, disbursing and accounting for those funds, preparing
monthly and annual financial reports and meeting any other reporting requirements. The Secretary is
responsible for keeping a complete and accurate record of Board proceedings and all Board-adopted
rules and regulations.
Scope and Objectives
The objectives of our audit were to assess the District's controls over cash investments and credit
card expenditures for the period January 1, 2014 through February 28, 2015. We expanded our scope
period for credit card expenditures back to January 1, 2012. Our audit addressed the following related
questions:
• Did the Board ensure its cash reserves were invested appropriately?
• Did the Board ensure that meal and travel expenditures charged to District credit cards were
adequately supported and for business-related purposes?
Audit Results
The Board did not adequately safeguard District funds. Its adopted investment policy did not limit
depositories to banks and trusts, as required by General Municipal Law, and listed a brokerage firm as
a depository where the District invested $328,063 in cash from two of its reserve funds. Furthermore,
the written agreement with the firm lists the Board members as the accounts' signatories rather than
the Treasurer. These practices weaken the safety, security and liquidity of funds, as required by law.
2 OFFICE OF THE NEW YORK STATE COMPTROLLER
The Board also did not exercise appropriate oversight or establish sound policies and procedures
related to credit card use. The District's policies for credit card use and travel expenditures were
inadequate,and the Board did not establish a policy covering meals and refreshments.Further,District
officials did not comply with existing policies, and the Board did not provide oversight to ensure that
District funds were used for legitimate District business purposes.
The Board allowed the Treasurer to pay credit card claims prior to Board approval. Moreover, the
Board did not conduct a thorough audit of claims but approved claims for payment without sufficient
supporting documentation.We reviewed all 37 credit card claims for the period January 1,2012 through
February 28, 2015, consisting of 842 charges totaling $162,708, and found that many of the claims
had at least one deficiency. For example, 33 claims with 777 charges totaling$149,063 (92 percent of
the dollar amount reviewed)were paid by the Treasurer prior to Board audit, and 234 charges totaling
$44,706 (28 percent) did not have receipts attached.
District officials also did not enforce the District's travel policy and did not have an adequate policy
for meals and refreshments. The Board did not ensure that travel was authorized in advance and
did not require members to provide itemized receipts and proof of attendance to support their travel
expenditures. For example, 111 charges for travel-related expenditures outside the County, totaling
$21,128, did not have receipts attached to the claims vouchers as required.During the same 38-month
period, 74 charges for meals and refreshments totaling$8,204 were also not supported by an itemized
receipt.
Because the Board did not provide oversight and ensure that all credit card charges were properly
audited and adequately supported, there is no assurance that all credit card charges made by District
officials were actual, necessary and reasonable District expenditures.
Comments of District Officials
The results of our audit and recommendations have been discussed with District officials, and their
comments, which appear in Appendix A, have been considered in preparing this report. District
officials generally agreed with our recommendations and indicated that they have taken, or plan to
take, corrective action.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 3
Introduction
Background The Orient Fire District(District)is a district corporation of the State,
distinct and separate from the Town of Southold and the County of
Suffolk in which it is located. The District covers approximately
five square miles, maintains of one main firehouse and two outlying
structures and provides fire protection and emergency rescue
services to approximately 900 residents. The District had 64 active
volunteer members who responded to 96 alarms in 2014 and had
62 active volunteers in 2015. The District's expenditures for 2014
were $636,916 and budgeted appropriations for 2015 were$669,295,
funded primarily with real property taxes.
The District is governed by an elected five-member Board of Fire
Commissioners (Board). The Board is responsible for the District's
overall financial management, including establishing internal
controls to ensure that assets are properly safeguarded. The Board is
also responsible for providing a thorough audit of each claim before
approving it for payment. The Treasurer is responsible for receiving,
disbursing and maintaining custody of District funds, and the
Secretary is responsible for keeping a complete and accurate record
of Board proceedings and all Board-adopted rules and regulations.
Objectives The objectives of our audit were to assess the District's controls over
cash investments and credit card expenditures. Our audit addressed
the following related questions:
• Did the Board ensure that its cash reserves were invested
appropriately?
• Did the Board ensure that meal and travel expenditures
charged to District credit cards were adequately supported
and for business-related purposes?
Scope and We examined the District's credit card expenditures and cash
Methodology investments for the period January 1,2014 through February 28,2015.
We expanded our audit scope period for credit card expenditures back
to January 1, 2012.
We conducted our audit in accordance with generally accepted
government auditing standards (GAGAS). More information on such
standards and the methodology used in performing this audit are
included in Appendix B of this report.
4 OFFICE OF THE NEW YORK STATE COMPTROLLER
Comments of The results of our audit and recommendations have been discussed
District Officials and with District officials,and their comments,which appear in Appendix
Corrective Action A, have been considered in preparing this report. District officials,
generally agreed with our recommendations and indicated that they
have taken, or plan to take, corrective action.
The Board has the responsibility to initiate corrective action.Pursuant
to Section 181-b of the New York State Town Law,a written corrective
action plan (CAP) that addresses the findings and recommendations
in this report must be prepared and forwarded to our office within 90
days.For more information on preparing and filing your CAP,please
refer to our brochure,Responding to an OSC Audit Report, which you
received with the draft audit report. We encourage the Board to make
this plan available for public review in the District Secretary's office.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 5
Cash Reserves
General Municipal Law (GML) requires the Board to adopt and
annually review a comprehensive investment policy that establishes
procedures and instructions for depositing and investing District
moneys in a manner that complies with statutory requirements and
safeguards public funds. GML provides that local governments may
designate one or more bank or trust companies,located and authorized
to do business in New York State, for the deposit of public funds.
Officials may temporarily invest moneys not required for immediate
expenditure in special time deposit accounts, in certificates of deposit
issued by a bank or trust company,' in New York State obligations or
in United States obligations.The law emphasizes safety, security and
liquidity over yield, because improper investments could result in a
risk of market fluctuation and the loss of principal.
The Board adopted an investment policy, last updated in February
2014, which designates the Treasurer as custodian of District funds.
However, the policy does not limit depositories to banks and trusts,
as authorized by GML. The policy listed a brokerage firm (firm) as
a depository, with which the District opened a securities account for
the deposit and investment of its two reserve funds totaling$328,063
(the capital improvement reserve with a balance of$60,510 and the
truck reserve with a balance of $267,553).2 The District's written
agreement with the firm states that the firm is not a bank and that
deposits are not insured by the Federal Deposit Insurance Corporation
(FDIC). While the firm invested most of the District's money with
various banks, the reserve accounts were not invested with a bank
or trust located and authorized to do business in New York State. In
addition, GML requires any amounts in excess of FDIC coverage to
be secured by a pledge of eligible securities. There is no indication
in the agreement between the District and the firm that the moneys
are secured. Furthermore, the agreement lists the District's Board
members as the signatories on the accounts,rather than the Treasurer.
As a result of not complying with GML requirements, the Board has
not adequately safeguarded District funds.
The Board should:
Recommendations
1. Amend its investment policy, close any improper accounts
and ensure that all District moneys are deposited and invested
as authorized by GML.
' Located and authorized to do business in New York State
2 As of February 2015
6 OFFICE OF THE NEW YORK STATE COMPTROLLER
2. Adhere to its investment policy and ensure that the Treasurer
invests cash on its behalf.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 7
Credit Cards
The Board is responsible for monitoring fiscal operations and
ensuring that assets are safeguarded and used appropriately. To fulfill
this duty, the Board should adopt policies and procedures to ensure
that transactions are authorized and for legitimate business purposes.
This includes ensuring that all claims are properly audited, all
expenditures are supported and claims are paid only after the Board
authorizes payment.
It is critical that the Board oversees the use of District credit cards.
An effective system of internal controls requires the Board to adopt
a credit card policy that identifies authorized users, defines credit
limits, describes the types and circumstances of purchases allowed
and specifies the prior approval and documentation needed to
support each purchase. The policy also should include procedures
for Board monitoring of credit card use to ensure accountability and
responsibility.
The Board did not exercise appropriate oversight or establish sound
policies and procedures related to credit card usage and did not provide
sufficient oversight of travel expenses and meal expenditures. The
District's policies for credit card use and travel expenditures were
inadequate, and the Board did not establish a policy for meals and
refreshments. District officials did not comply with existing policies,
and the Board did not provide oversight to ensure that funds were
used for legitimate District business purposes.Due to a lack of formal
policies and the Board's failure to properly audit all claims, District
officials took a lax approach to the use of District-issued credit cards
and the payment of related charges.
Audit of Claims The Board must audit all claims against the District and,by resolution,
direct the Treasurer to make payments for approved, actual and
necessary amounts. A thorough claims audit process verifies that all
claims are properly itemized and contain sufficient documentation
for the Board to determine the nature of the purchase,verifies that the
amounts represent actual and necessary District expenses and verifies
that the purchases comply with statutory requirements.The Treasurer
may not pay claims prior to Board audit except for those claims legally
exempt from this requirement.' Credit card claims must be audited
prior to payment,as they do not fall within the statutory exceptions in
New York State Town Law.
3 For example,public utility services,postage,freight and express charges.These
claims still have to be presented for audit at the next Board meeting.
8 OFFICE OF THE NEW YORK STATE COMPTROLLER
The Board allowed the Treasurer to pay credit card claims prior to
Board approval. Moreover, it did not conduct a thorough claims
audit and approved claims for payment without sufficient supporting
documentation. We reviewed 37 credit card claims for the period
January 1,2012 through February 28,2015, composed of 842 charges
totaling $162,708,4 and compared the check dates to the Board audit
signature dates. Of 37 claims, 33 claims with 777 charges totaling
$149,063 were paid by the Treasurer prior to Board audit.' The
Treasurer explained that she made payments prior to Board meeting
dates to avoid late fees being charged to the District.
Additionally, 234 charges totaling $44,706 did not have receipts
attached, and 71 charges totaling $12,065 had receipts that were not
sufficiently itemized. Despite the policy requirement for cardholders
to provide an explanation for missing receipts, none of the credit
card statements contained any such explanations. Because most of
the charges were for travel/conference and meal expenditures,6 we
examined those in detail (see findings in the next two sections).
Because the Treasurer paid credit card claims prior to audit and the
Board did not conduct a thorough claims audit, claims were paid
without adequate support and the Board does not have adequate
assurance that all credit card charges were actual and necessary
District expenditures.
Travel and Conference GML allows fire districts to pay for actual and necessary expenses
Expenses for travel, meals, lodging and registration fees at conferences or
conventions attended by authorized district officials, employees or
• officers. To ensure travel-related expenditures are legitimate District
costs, the Board should establish a travel and conference policy and
monitor compliance with it.The policy should give clear and specific
guidelines with respect to attendance and associated costs in order
to minimize the risk of excessive expenditure of public funds, and
it should delineate methods of tracking these expenses, such as the
review of detailed travel and expense vouchers.
The Board established a travel policy which provides guidance for
attendance and associated costs.The policy requires itemized receipts
to be retained by District officials and submitted to the District so that
the Treasurer can reconcile charges made to the credit card statements.
4 These claims included all travel and conference charges and all meals and
refreshments charges,as described in this report,and all claims for other charges
incurred during our audit period.
5 Many claims had more than one deficiency.
6 Of all 842 charges incurred totaling $162,708, there were 321 travel-related
charges(38 percent)totaling$61,164 and 180 charges for meals and refreshments
(21 percent)totaling$22,290.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 9
However, District officials did not have any procedures to enforce
compliance with the policy. The Board did not ensure that travel was
authorized in advance and did not require travelers to provide itemized
receipts and proof of attendance to support their travel expenditures.
Without such documentation,the Board has no means of determining
whether the charges are necessary and appropriate.
From January 1, 2012 through February 28, 2015, District credit
cards were used to pay for 22 trips outside Suffolk County to attend
conferences, seminars and other training events. Charges included
registration fees, lodging, meals, airfare, tolls, transportation and
gasoline. There were 321 travel-related charges on District credit
cards totaling $61,164, of which 111 charges totaling $21,128 did
not have receipts attached to the claims vouchers.Further, 15 charges
totaling$1,512 had receipts that were not itemized.
In addition, 11 of the trips had no Board resolutions authorizing
the travel in advance. The authorizations we did find in the minutes
were vague, generally granting permission to "members" rather
than specific individuals, and did not always provide the number of
members authorized to travel. Further,District officials did not attach
proof of completion or training certifications, where applicable, to
support travel expenditures.
Travel-Related Charges in 2012 — During 2012, District officials
charged 138 travel-related expenses totaling $21,021. Of these, 48
charges totaling$9,516 were not supported by receipts. An additional
12 charges totaling $938 were supported by receipts that were not
itemized.
Many of these unsupported claims were related to a trip to Laughlin,
Nevada for a conference'which the Board authorized three members
to attend for training purposes from October 15 through October
18, 2012. The District's credit cards were used to pay $7,182 in
associated charges. Seventeen charges totaling $4,846 were missing
receipts, and other charges were unauthorized or questionable. The
Board resolution authorized payment of the registration costs (which
included lodging) for three members, to include $600 for the first
registrant and $500 for each additional registrant, plus meals. The
resolution required the attendees to pay for their own transportation,
and did not provide the name or title of the individuals authorized to
attend.
7 The 2012 International Association of Dive Rescue Specialists (IADRS)
conference
1 0 OFFICE OF THE NEW YORK STATE COMPTROLLER
The District paid $2,100 for four registrations to this conference,
rather than $1,600 for three as authorized. Our review showed that
three members attended the conference. Two registration charges
were not supported by registration forms and the claims did not
indicate the names of the registered participants. The District also
paid$1,650 for two airline charges with nothing attached to the claim
to support the charges, and the claim did not indicate the travelers'
names or destinations. Further, while the Board resolution indicated
that participants should pay for their own travel, only one individual
reimbursed $412 of the $1,650. Finally, there were no training
certificates or proof of completion with the claims or in personnel
files to show that training was completed at this conference. Other
questionable charges included:
• Two charges totaling $395 appear to be for lodging at a Las
Vegas hotel after the conference, but the charges were not
supported by receipts or authorized by Board resolution.
• One charge of$134, supported by a receipt and signed for by
a chief, was for a hotel room located one half mile from the
conference site during the same time as the conference.There
was no indication of why this additional room was necessary
when lodging was included in the registration fee.
• Two charges for meals totaling $486 were supported with
receipts but predated the conference.For example,one charge
of$417 for dinner at a Las Vegas restaurant occurred two days
before the start of the conference.
Travel-Related Charges in 2013 — During 2013, District officials
incurred 100 travel-related charges totaling $21,277. Of these,
32 charges totaling $6,915 were not supported by receipts. For
example, officials paid $2,953 for registration and airfare related to
a conference,without any support attached to the claim. In addition,
no receipts were provided for hotel charges related to a Baltimore
convention and for trips to Verona, Saratoga and Albany, New York,
totaling $1,951.
Travel-Related Charges in 2014—During 2014, officials incurred 83
travel-related charges totaling $18,866, of which 31 charges totaling
$4,697 were not supported by receipts. For example,District officials
did not submit five receipts totaling $2,351 for hotel charges related
to a 2014 Baltimore convention and for conferences in Albany and
Rochester,New York. Additionally, no receipts were attached to $79
in claims for food at the Albany conference.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 11
By not ensuring that all travel is authorized by the Board and properly
supported, District officials did not enforce their own policy or
adhere to GML. As a result, District credit cards have been used for
unsupported purchases,and there is limited assurance that all charges
were actual, necessary and reasonable expenses of the District.
Meals and Refreshments Generally, meals are considered a personal expense unless the
District has official business that must be conducted during a typical
mealtime. These situations could include Board meetings, work
sessions or other meetings attended by District officials outside of
their work area for extended periods of time, or events that prevent
District volunteers or other personnel from taking time off to eat during
mealtime. Accordingly, when the Board determines it is appropriate
to permit expenditures for meals or refreshments, District officials
incurring these expenditures must maintain sufficient supporting
documentation to justify that there was a business purpose.The Board
must adopt written policies and procedures to establish rationale for
meal purchases, confirm that meal and refreshment expenses are
actual and necessary by requiring sufficient support for the charges,
and ensure that charges are reasonable.
The Board has not adopted a policy for meals and refreshments.While
the District's credit card policy includes constraints on meal charges
during non-local travel, it does not address meals and refreshments
purchased within the local area. During the period January 1, 2012
through February 28, 2015, District officials incurred 180 meal and
refreshment charges totaling$22,290 using their District-issued credit
cards. Of this amount, the District did not have adequate support for
147 charges totaling $18,196. For example:
• Seventy-four charges totaling $8,204 were not supported by
itemized receipts attached to the claims vouchers.
• Twenty-four charges totaling $2,227 could be attributed to
District business such as Board meetings, work sessions or
other meetings attended by District officials, but there was
no documentation to indicate the need to expend funds for
a meal. For example, a credit card was used to charge $106
for two individuals at a local restaurant at 9:00 p.m. with the
notation"Chiefs meeting"on the receipt. While the individual
using the card was a chief, it was not evident who the second
individual was or why a meal was necessary.
• Thirty-six meal charges totaling $6,494 were attributed'
to training events. While all these charges had receipts, not
8 Traced from various records:credit card statements,receipts or sign-in sheets
12 OFFICE OF THE NEW YORK STATE COMPTROLLER
all were supported by an official training record or sign-in
sheet. Other charges occurred in the evening after a training
event had ended. None of the charges contained a list of the
individuals who participated in the meals. In the absence of
a policy for meals and refreshments, it was not clear whether
these were necessary charges.
• Thirteen miscellaneous charges totaling $1,271 could be
traced to receipts but could not be tied to District-sponsored
events.
Without written policies and procedures for credit card use
requirements and without effective monitoring by the Board,
the District will continue to be at risk of paying for inappropriate
purchases.
Recommendations The Board should:
3. Ensure that all credit card claims are properly audited prior to
payment by the Treasurer.
4. Ensure that all travel is preapproved by the Board.
5. Ensure that all credit card charges are actual, necessary
and reasonable charges supported by itemized receipts and
consider developing a travel voucher or expense report to
document, organize and account for travel-related charges.
6. Investigate the questionable charges identified in this report
and seek reimbursement where appropriate.
7. Require travelers to provide documentation of training, such
as training certificates, for all appropriate travel expenditures
charged to District credit cards.
8. Develop and adopt a written policy and formal procedures to
ensure that food purchases are adequately supported and are
necessary District expenditures.
The Treasurer should:
9. Ensure that sufficient supporting documentation is attached
to each claim that is submitted to the Board for audit and
payment approval.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 13
APPENDIX A
RESPONSE FROM DISTRICT OFFICIALS
The District officials'response to this audit can be found on the following pages.
14 OFFICE OF THE NEW YORK STATE COMPTROLLER
SUENr"
1 1
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...-SRF
ORIENT FIRE ,DISTRICT
2300 Main Road, Orient, NY 11957
631-323-2445 0 Fax 631-323-9706
orientfired@optonline.net
Mr. Ira McCracken
Chief Examiner
Office of the State Comptroller-
NYS Office Bldg: 3A10'
250 Veteran.Memorial orial Highway
Hauppauge, NY 11783-5533
Orient hire District,Cash Reserves,and Credit Cards
Audit Report Nuniber 2015M-319
Thank you for conducting an audit of oil fire district. On behalf of the taxpayers, we want to,
thank you for'your time and diligence in your review. The fire district is always desirous of
improving our operations and we find Your audit helpful in this effort. Our Corrective Action
Plan will be integral oi.our response.
With-tegard to your findings.
(1) OUr investment policy bas been revised to require that all funds are held in New York
State depositories authorized to do business and iodated in Nevar- York State. We will
ensure that all fiends are so_held. We are-reviewing all of our present funds.
(2) We will add-the treasurer as an anthorized signati.tre-On the investment accounts as you
suggested, but we disagree that not having,this•officer as a signator presents any risk to
the District..
(3) Regarding travel. We have created a travel4planner to plan proposed and track actual,
travel expenses. We have revised our practices to require commissioner approval for all
travel expenses. We will ensure that all receipts are collected and reviewed arid that no
expense is reimbursed without an itemized receipt_or proof of payment.
(4) With regard to a policy for meals and refreshments, the District will enforce its travel
policy and ensure that travel is confined to the limits as provided by the-GSA.
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 15
(5) Regarding the credit cards. Prior to the audit, the Board of Fire. Commissioners was
working with fts iiew attorney to review and.i•evise a new Credit card policy. That policy
was in fact completed though not adopted during the period of your audit. The Board did
in fact pay sante credit card ,bills in advance of the audit in order to, avoid late fees.
However, we disagree that the Board took a "lax approach"to reviewing them. The credit
card statements were always reviewed in depth shortly after the credit card was paid.
However, we recognize tlie',best practice is-to'review the purchases prior to payment of
the credit card. We have moved the-payment date for the credit card to after our board
meeting to permit for review and audit.of',the claims prior to payment. We do agree=that
there were instances where items were paid without supporting documentation and that
practice has ceased. However, we always verified that such ptirchases were legitimate
expenditures even if there were missing receipts.
Additionally; our policy has been modi tied to detail every person who holds a credit card
by title and have added the existing.credit limits to the policy.
We disagree _that travel vas tint approved in advance, but it is more likely that the
approval was not properly recorded in detail. We will enhance our minutes to record the
actual approvals Of travel expcnscs, the names of members approved; and Other related
approvals.
We have investigated'all Credit card Charges raised in this report and'have determined that
they are all valid:
(6) Regarding the_policies,for meals and.refreshm.pt , we have now adopted such a policy
which sets liliiits upon the amount to lie expended per person and establishes other`ruleS
for both the awards diners and all'other events and occasions.
(7) We will continue-tci ensure that all training that confirms attendance through a certificate
is documented utili7ilig the certificate.
(8) To the extent that we have not specifically responded-to one of your suggestions, we can
ensure that we have and will continue to adopt and implement such,suggestions.
Joseph Wysocki
Chairman of the Board
Orient Fire District
Orient, New York
16 OFFICE OF THE NEW YORK STATE COMPTROLLER
APPENDIX B
AUDIT METHODOLOGY AND STANDARDS
The objectives of this audit were to review processes and procedures over the District's cash
investments and credit cards for the period January 1, 2014 through February 28, 2015. Due to a lack
of controls over District credit card use, we extended our scope period back to January 1, 2012 for
further examination of credit cards. To accomplish the objectives of this audit and obtain valid audit
evidence, our procedures included the following:
• We reviewed the District's investment policy to determine the types of investments for which
the District set aside cash and for what purpose.
• We reviewed the District's investment account statements and cash account agreements with
the firm to ascertain the composition of the investments and to determine who held authority
to invest funds on behalf of the District.
• We researched relevant legal provisions to determine if the District's investments were
appropriately invested in a bank or trust company authorized to do business in the State.
• We reviewed applicable policies, such as the financial policies, travel policies and credit card
policy,to determine if the District complied with its internal policies.
• We interviewed District officials, such as Board members and the Treasurer, to obtain an
understanding of the control environment over credit card use, the audit of credit card claims
and accountability over expenses charged on credit cards.
• We obtained 37 credit card claim vouchers, containing 37 credit card statements paid from
January 1, 2012 through February 28, 2015, from claim voucher packets and determined if
each of the District's claim vouchers had appropriate supporting documentation for all credit
card charges in the form of itemized receipts.
• We reviewed the credit card claim vouchers to determine when the Board members audited
each claim and compared the dates to the dates of payment made by the Treasurer.
• We reviewed charges to determine their nature and separated the travel-related charges from
charges for meals and refreshments.
• We reviewed travel charges for adequate support. We examined Board minutes to determine if
the Board authorized trips prior to the event, and we requested and examined supplementary
documentation such as training certificates or proof of completion for these events.
• We reviewed meal and refreshment charges made in the local area for adequate support. We
determined if these charges were for business purposes by analyzing documentation available
with the claims vouchers, such as credit card statements and itemized receipts, to ascertain
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 17
whether the charges were actual, necessary and supported. We also looked for guest lists
attached to the receipts to determine if District officials were having the meal.
• We reviewed supplementary documentation, such as sign-in sheets or attendance rosters, to
trace dates, times, locations and attendees of training to the dates, times and locations of the
meals. If a charge could not be traced to a stated purpose, we reviewed sign-in sheets to assist
in our determination of a business purpose behind the meal charges and the reasonableness of
those charges.
We conducted this performance audit in accordance with GAGAS. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.
1 8 OFFICE OF THE NEW YORK STATE COMPTROLLER
,
APPENDIX C
HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT
To obtain copies of this report,write or visit our web page:
Office of the State Comptroller
' Public Information Office
110 State Street, 15th Floor
Albany,New York 12236
(518)474-4015
http://vvww.osc.state.ny.us/localgov/
DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 19
i
APPENDIX D
OFFICE OF THE STATE COMPTROLLER
DIVISION OF LOCAL GOVERNMENT
AND SCHOOL ACCOUNTABILITY
Andrew A. SanFilippo,Executive Deputy Comptroller
Gabriel F.Deyo,Deputy Comptroller
Tracey Hitchen Boyd,Assistant Comptroller
LOCAL REGIONAL OFFICE LISTING
BINGHAMTON REGIONAL OFFICE NEWBURGH REGIONAL OFFICE
H.Todd Eames,Chief Examiner Tenneh Blamah,Chief Examiner
Office of the State Comptroller Office of the State Comptroller
State Office Building,Suite 1702 33 Airport Center Drive,Suite 103
44 Hawley Street New Windsor,New York 12553-4725
Binghamton,New York 13901-4417 (845)567-0858 Fax(845)567-0080
(607)721-8306 Fax(607)721-8313 Email.Muni-Newburgh@osc.state.nv.us
Email:Muni-Binghamton@osc.state.ny.us
Serving:Columbia,Dutchess,Greene,Orange,
Serving:Broome,Chenango,Cortland,Delaware, Putnam,Rockland,Ulster,Westchester Counties
Otsego,Schoharie,Sullivan,Tioga,Tompkins Counties
ROCHESTER REGIONAL OFFICE
BUFFALO REGIONAL OFFICE Edward V.Grant,Jr.,Chief Examiner
Jeffrey D.Mazula,Chief Examiner Office of the State Comptroller
Office of the State Comptroller The Powers Building
295 Main Street,Suite 1032 16 West Main Street,Suite 522
Buffalo,New York 14203-2510 Rochester,New York 14614-1608
(716)847-3647 Fax(716)847-3643 (585)454-2460 Fax(585)454-3545
Email:Muni-Buffalo a,osc.state.ny.us Email:Muni-Rochesterosc.state.ny.us
Serving:Allegany,Cattaraugus,Chautauqua,Erie, Serving.Cayuga,Chemung,Livingston,Monroe,
Genesee,Niagara,Orleans,Wyoming Counties Ontario,Schuyler,Seneca,Steuben,Wayne,Yates Counties
GLENS FALLS REGIONAL OFFICE SYRACUSE REGIONAL OFFICE
Jeffrey P.Leonard,Chief Examiner Rebecca Wilcox,Chief Examiner
Office of the State Comptroller Office of the State Comptroller
One Broad Street Plaza State Office Building,Room 409
Glens Falls,New York 12801-4396 333 E.Washington Street
(518)793-0057 Fax(518)793-5797 Syracuse,New York 13202-1428 -
Email:Muni-GlensFalls gosc state nv.us (315)428-4192 Fax(315)426-2119
Email. Muni-Syracuse(tiosc state.ny us
Serving:Albany,Clinton,Essex,Franklin,
Fulton,Hamilton,Montgomery,Rensselaer, Serving:Herkimer,Jefferson,Lewis,Madison,
Saratoga,Schenectady,Warren,Washington Counties Oneida,Onondaga,Oswego,St.Lawrence Counties
HAUPPAUGE REGIONAL OFFICE STATEWIDE AUDITS
Ira McCracken,Chief Examiner Aim C.Singer,Chief Examiner
Office of the State Comptroller State Office Building,Suite 1702
NYS Office Building,Room 3A10 44 I-Iawley Street
250 Veterans Memorial Highway Binghamton,New York 13901-4417
Hauppauge,New York 11788-5533 (607)721-8306 Fax(607)721-8313
(631)952-6534 Fax(631)952-6530
Email:Muni-Hauppauge@osc.state.ny.us
Serving:Nassau and Suffolk Counties
20 OFFICE OF THE NEW YORK STATE COMPTROLLER