A report issued Friday by the state comptroller’s office criticized the Orient Fire District’s controls over cash investments and credit card expenditures.
The state found that the fire district’s board of commissioners “took a lax approach to the use of district-issued credit cards and the payment of related charges.” It “did not adequately safeguard district funds” and “did not exercise appropriate oversight or establish sound policies and procedures related to credit card use,” the auditors said.
See full report here.
The board invested $328,063 in cash from two of its reserve funds with a brokerage firm in accounts that were not insured by the Federal Deposit Insurance Corporation or otherwise secured, according to the report. State law limits deposit and investment of public funds to banks and trust companies or N.Y. state and federal government obligations.
Inadequate oversight allowed the district treasurer to pay more than $149,000 in credit card charges without prior board approval and nearly $45,000 in credit card charges with no receipt attached, according to the audit.
The district lacked adequate policies for credit card use and travel expenditures, and had no policy covering meals and refreshments, according to the report.
The board of commissioners 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,” the report said. “During the same 38-month period, 74 charges for meals and refreshments totaling $8,204 were also not supported by an itemized receipt,” it said.
“There is no assurance that all credit card charges made by District of cials were actual, necessary and reasonable District expenditures.”
The audit initially covered 2014 through Feb. 28, 2015, but was then extended to include 2012 and 2013 for credit card expenditures.
The district has revised its investment policy to require that all district funds are deposited and invested in depositories authorized to do business in New York, as required by law, according to an undated letter to the comptroller’s office from Joseph Wysocki, chairman of the board of commissioners of the Orient Fire District. The response letter was attached as an exhibit to the audit report.
The district has also revised its practices to require commissioner approval for all travel expenses.
“We will ensure that all receipts are collected and reviewed and that no expense is reimbursed without an itemized receipt or proof of payment,” Wysocki wrote. “The district will enforce its travel policy and ensure that travel is confined to the limits” required by the state.
The board had already written, though not yet adopted, a new credit card policy while the audit was being conducted, Wysocki said.
He said the board disagreed that it took a “lax approach” to overseeing credit card use. “The credit card statements were always reviewed in depth shortly after the credit card was paid,” he said. But, he said, the board recognizes the best practice is to review the purchases prior to payment. Sometimes the payment was made prior to a claim audit to avoid incurring late charges, according to the district response. The district has changed the due date on these accounts to dates after the board meeting, to allow for prior review before payment without incurring late charges.
The board always verified that credit card expenditures were legitimate even if they were missing receipts, Wysocki said.
He also noted the board’s disagreement that travel was not approved in advance and said it is “more likely that the approval was not properly recorded in detail” in the board’s meeting minutes. The board will keep better minutes going forward, he said.
