Division of ocaL overnment & schooL ccountabiLity Orient ... · Following is a report of our audit...

Division of LocaL Government & schooL accountabiLity

o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r

report of ExaminationPeriod Covered:

January 1, 2014 — February 28, 2015

2015M-319

Orient Fire DistrictCash Reserves

and Credit Cards

thomas p. Dinapoli

Page

AUTHORITY LETTER 1

EXECUTIVE SUMMARY 2

INTRODUCTION 4 Background 4 Objectives 4 Scope and Methodology 4 CommentsofDistrictOfficialsandCorrectiveAction 5

CASH RESERVES 6 Recommendations 6

CREDIT CARDS 8 AuditofClaims 8 Travel and Conference Expenses 9 Meals and Refreshments 12 Recommendations 13

APPENDIX A ResponseFromDistrictOfficials 14APPENDIX B AuditMethodologyandStandards 17APPENDIX C HowtoObtainAdditionalCopiesoftheReport 19APPENDIX D LocalRegionalOfficeListing 20

Table of Contents

11Division of LocaL Government anD schooL accountabiLity

State of New YorkOffice of the State Comptroller

Division of Local Governmentand School Accountability March2016

DearFireDistrictOfficials:

A toppriorityof theOfficeof theStateComptroller is tohelp localgovernmentofficialsmanagegovernment resources efficiently and effectively and, by so doing, provide accountability for taxdollarsspenttosupportgovernmentoperations.TheComptrolleroverseesthefiscalaffairsoflocalgovernmentsstatewide,aswellascompliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversightisaccomplished,inpart,throughouraudits,whichidentifyopportunitiesfor improving operations and Board of Fire Commissioners governance.Audits also can identifystrategies to reduce costs and to strengthen controls intended to safeguard local government assets.

FollowingisareportofourauditoftheOrientFireDistrict,entitledCashReservesandCreditCards.This auditwas conducted pursuant toArticleV, Section 1 of theStateConstitution and theStateComptroller’sauthorityassetforthinArticle3oftheGeneralMunicipalLaw.

This audit’s results and recommendations are resources for local government officials to use ineffectively managing operations and in meeting the expectations of their constituents. If you have questionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedat the end of this report.

Respectfullysubmitted,

Office of the State ComptrollerDivision of Local Governmentand School Accountability

State of New YorkOffice of the State Comptroller

2 Office Of the New YOrk State cOmptrOller2

Office of the State ComptrollerState of New York

EXECUTIVE SUMMARY

TheOrientFireDistrict(District)isadistrictcorporationoftheState,distinctandseparatefromtheTownofSouthold,inSuffolkCounty(County).TheDistrict’sexpendituresfor2014were$636,916,andbudgetedappropriationsfor2015were$669,295,fundedprimarilywithrealpropertytaxes.

TheDistrict covers approximately five squaremiles and serves approximately 900 residents.TheBoardofFireCommissioners(Board)iscomposedoffiveelectedmembersandisresponsiblefortheDistrict’soverallfinancialmanagementandforsafeguardingDistrictresources.TheBoardappointsaTreasurerandaSecretary.TheTreasureractsastheDistrict’schieffiscalofficerandisresponsiblefor the receiptandcustodyofDistrict funds,disbursingandaccountingfor those funds,preparingmonthlyandannualfinancialreportsandmeetinganyotherreportingrequirements.TheSecretaryisresponsible 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 cardexpendituresfortheperiodJanuary1,2014throughFebruary28,2015.WeexpandedourscopeperiodforcreditcardexpendituresbacktoJanuary1,2012.Ourauditaddressedthefollowingrelatedquestions:

• 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 depositoriestobanksandtrusts,asrequiredbyGeneralMunicipalLaw,andlistedabrokeragefirmasadepositorywheretheDistrictinvested$328,063incashfromtwoofitsreservefunds.Furthermore,thewrittenagreementwiththefirmliststheBoardmembersastheaccounts’signatoriesratherthantheTreasurer.Thesepracticesweakenthesafety,securityandliquidityoffunds,asrequiredbylaw.


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,andtheBoarddidnotestablishapolicycoveringmealsandrefreshments.Further,Districtofficialsdidnotcomplywithexistingpolicies,andtheBoarddidnotprovideoversighttoensurethatDistrict funds were used for legitimate District business purposes.

TheBoardallowedtheTreasurer topaycreditcardclaimsprior toBoardapproval.Moreover, theBoarddidnotconductathoroughauditofclaimsbutapprovedclaimsforpaymentwithoutsufficientsupportingdocumentation.Wereviewedall37creditcardclaimsfortheperiodJanuary1,2012throughFebruary28,2015,consistingof842chargestotaling$162,708,andfoundthatmanyoftheclaimshadatleastonedeficiency.Forexample,33claimswith777chargestotaling$149,063(92percentofthedollaramountreviewed)werepaidbytheTreasurerpriortoBoardaudit,and234chargestotaling$44,706(28percent)didnothavereceiptsattached.

DistrictofficialsalsodidnotenforcetheDistrict’stravelpolicyanddidnothaveanadequatepolicyfor 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.Forexample,111chargesfor travel-relatedexpendituresoutsidetheCounty, totaling$21,128,didnothavereceiptsattachedtotheclaimsvouchersasrequired.Duringthesame38-monthperiod,74chargesformealsandrefreshmentstotaling$8,204werealsonotsupportedbyanitemizedreceipt.

Because the Board did not provide oversight and ensure that all credit card charges were properly auditedandadequatelysupported,thereisnoassurancethatallcreditcardchargesmadebyDistrictofficialswereactual,necessaryandreasonableDistrictexpenditures.

Comments of District Officials

TheresultsofourauditandrecommendationshavebeendiscussedwithDistrictofficials,andtheircomments, which appear inAppendixA, have been considered in preparing this report. Districtofficialsgenerallyagreedwithourrecommendationsandindicatedthattheyhavetaken,orplantotake,correctiveaction.


Background

Introduction

Objectives

Scope andMethodology

TheOrientFireDistrict(District)isadistrictcorporationoftheState,distinct and separate from the Town of Southold and the County of Suffolk in which it is located. The District covers approximately fivesquaremiles,maintainsofonemainfirehouseandtwooutlyingstructures and provides fire protection and emergency rescueservicestoapproximately900residents.TheDistricthad64activevolunteermembers who responded to 96 alarms in 2014 and had62 active volunteers in 2015.TheDistrict’s expenditures for 2014were$636,916andbudgetedappropriationsfor2015were$669,295,funded primarily with real property taxes.

TheDistrict is governedby an electedfive-memberBoard ofFireCommissioners (Board). The Board is responsible for the District’s overall financial management, including establishing internalcontrols to ensure that assets are properly safeguarded. The Board is also responsible for providing a thorough audit of each claim before approvingitforpayment.TheTreasurerisresponsibleforreceiving,disbursing and maintaining custody of District funds, and theSecretary is responsible for keeping a complete and accurate record of Board proceedings and all Board-adopted rules and regulations.

The objectives of our audit were to assess the District’s controls over cash investments and credit card expenditures. Our audit addressed thefollowingrelatedquestions:

• 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?

We examined the District’s credit card expenditures and cashinvestmentsfortheperiodJanuary1,2014throughFebruary28,2015.WeexpandedourauditscopeperiodforcreditcardexpendituresbacktoJanuary1,2012.

We conducted our audit in accordance with generally acceptedgovernmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixBofthisreport.


Comments ofDistrict Officials andCorrective Action

The results of our audit and recommendations have been discussed withDistrictofficials,andtheircomments,whichappearinAppendixA,havebeenconsidered inpreparing this report.Districtofficials,generally agreed with our recommendations and indicated that they havetaken,orplantotake,correctiveaction.

The Board has the responsibility to initiate corrective action. Pursuant toSection181-boftheNewYorkStateTownLaw,awrittencorrectiveactionplan(CAP)thataddressesthefindingsandrecommendationsinthisreportmustbepreparedandforwardedtoourofficewithin90days.FormoreinformationonpreparingandfilingyourCAP,pleaserefertoourbrochure,Responding to an OSC Audit Report, which you receivedwiththedraftauditreport.WeencouragetheBoardtomakethisplanavailableforpublicreviewintheDistrictSecretary’soffice.


Cash Reserves

General Municipal Law (GML) requires the Board to adopt andannually 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 safeguardspublicfunds.GMLprovidesthatlocalgovernmentsmaydesignateoneormorebankortrustcompanies,locatedandauthorizedtodobusiness inNewYorkState, for thedeposit ofpublic funds.Officialsmaytemporarilyinvestmoneysnotrequiredforimmediateexpenditureinspecialtimedepositaccounts,incertificatesofdepositissuedbyabankortrustcompany,1 in New York State obligations or inUnitedStatesobligations.Thelawemphasizessafety,securityandliquidityoveryield,becauseimproperinvestmentscouldresultinariskofmarketfluctuationandthelossofprincipal.

TheBoard adopted an investment policy, last updated inFebruary2014,whichdesignatestheTreasurerascustodianofDistrictfunds.However,thepolicydoesnotlimitdepositoriestobanksandtrusts,asauthorizedbyGML.Thepolicylistedabrokeragefirm(firm)asadepository,withwhichtheDistrictopenedasecuritiesaccountforthedepositandinvestmentofitstworeservefundstotaling$328,063(thecapitalimprovementreservewithabalanceof$60,510andthetruck reservewith a balance of $267,553).2 The District’s written agreementwith thefirmstates that thefirm isnot abankand thatdeposits are not insured by the Federal Deposit Insurance Corporation (FDIC).While thefirminvestedmostof theDistrict’smoneywithvariousbanks, the reserveaccountswerenot investedwithabankor trust located and authorized to do business in New York State. In addition,GMLrequiresanyamountsinexcessofFDICcoveragetobe secured by a pledge of eligible securities. There is no indication intheagreementbetweentheDistrictandthefirmthatthemoneysare secured. Furthermore, the agreement lists the District’s Boardmembersasthesignatoriesontheaccounts,ratherthantheTreasurer.

AsaresultofnotcomplyingwithGMLrequirements,theBoardhasnot adequately safeguarded District funds.

TheBoardshould:

1. Amend its investment policy, close any improper accountsand ensure that all District moneys are deposited and invested asauthorizedbyGML.

1 Located and authorized to do business in New York State2 AsofFebruary2015

Recommendations


2. AdheretoitsinvestmentpolicyandensurethattheTreasurerinvests cash on its behalf.


Credit Cards

The Board is responsible for monitoring fiscal operations andensuringthatassetsaresafeguardedandusedappropriately.Tofulfillthisduty,theBoardshouldadoptpoliciesandprocedurestoensurethat transactions are authorized and for legitimate business purposes. This includes ensuring that all claims are properly audited, allexpenditures 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. AneffectivesystemofinternalcontrolsrequirestheBoardtoadopta credit card policy that identifies authorized users, defines creditlimits,describes the typesandcircumstancesofpurchasesallowedand specifies the prior approval and documentation needed tosupport 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 andmeal expenditures.TheDistrict’s policies for credit card use and travel expenditures were inadequate,and theBoarddidnotestablishapolicyformealsandrefreshments.Districtofficialsdidnotcomplywithexistingpolicies,and the Board did not provide oversight to ensure that funds were used for legitimate District business purposes. Due to a lack of formal policiesandtheBoard’sfailuretoproperlyauditallclaims,DistrictofficialstookalaxapproachtotheuseofDistrict-issuedcreditcardsand the payment of related charges.

TheBoardmustauditallclaimsagainsttheDistrictand,byresolution,direct the Treasurer to make payments for approved, actual andnecessaryamounts.Athoroughclaimsauditprocessverifiesthatallclaims are properly itemized and contain sufficient documentationfortheBoardtodeterminethenatureofthepurchase,verifiesthattheamountsrepresentactualandnecessaryDistrictexpensesandverifiesthat 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.3 Credit card claims must be audited priortopayment,astheydonotfallwithinthestatutoryexceptionsinNew York State Town Law.

Audit of Claims

3 Forexample,publicutilityservices,postage,freightandexpresscharges.Theseclaims still have to be presented for audit at the next Board meeting.


The Board allowed the Treasurer to pay credit card claims prior to Board approval. Moreover, it did not conduct a thorough claimsauditandapprovedclaimsforpaymentwithoutsufficientsupportingdocumentation.We reviewed 37 credit card claims for the periodJanuary1,2012throughFebruary28,2015,composedof842chargestotaling$162,708,4 and compared the check dates to the Board audit signaturedates.Of37claims,33claimswith777charges totaling$149,063 were paid by the Treasurer prior to Board audit.5 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 receiptsattached,and71chargestotaling$12,065hadreceiptsthatwerenotsufficientlyitemized.Despitethepolicyrequirementforcardholdersto provide an explanation for missing receipts, none of the creditcard statements contained any such explanations. Because most of the chargeswere for travel/conference andmeal expenditures,6 we examinedthoseindetail(seefindingsinthenexttwosections).

Because the Treasurer paid credit card claims prior to audit and the Board did not conduct a thorough claims audit, claims were paidwithout adequate support and the Board does not have adequate assurance that all credit card charges were actual and necessary District expenditures.

GMLallowsfiredistricts topayforactualandnecessaryexpensesfor travel, meals, lodging and registration fees at conferences orconventions attended by authorized district officials, employees orofficers.Toensuretravel-relatedexpendituresarelegitimateDistrictcosts,theBoardshouldestablishatravelandconferencepolicyandmonitorcompliancewithit.Thepolicyshouldgiveclearandspecificguidelines with respect to attendance and associated costs in order tominimize the riskofexcessiveexpenditureofpublic funds,anditshoulddelineatemethodsoftrackingtheseexpenses,suchasthereview 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 toberetainedbyDistrictofficialsandsubmittedtotheDistrictsothatthe Treasurer can reconcile charges made to the credit card statements.

Travel and Conference Expenses

4 These claims included all travel and conference charges and all meals and refreshmentscharges,asdescribedinthisreport,andallclaimsforotherchargesincurred during our audit period.

5 Manyclaimshadmorethanonedeficiency.6 Of all 842 charges incurred totaling $162,708, there were 321 travel-relatedcharges(38percent)totaling$61,164and180chargesformealsandrefreshments(21percent)totaling$22,290.


However,District officials didnot have anyprocedures to enforcecompliance 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. Withoutsuchdocumentation,theBoardhasnomeansofdeterminingwhether the charges are necessary and appropriate.

From January 1, 2012 through February 28, 2015, District creditcards were used to pay for 22 trips outside Suffolk County to attend conferences, seminars and other training events. Charges includedregistration fees, lodging, meals, airfare, tolls, transportation andgasoline. There were 321 travel-related charges on District credit cards totaling $61,164, ofwhich 111 charges totaling $21,128 didnothavereceiptsattachedtotheclaimsvouchers.Further,15chargestotaling$1,512hadreceiptsthatwerenotitemized.

In addition, 11 of the trips had no Board resolutions authorizingthetravelinadvance.Theauthorizationswedidfindintheminuteswere vague, generally granting permission to “members” ratherthanspecificindividuals,anddidnotalwaysprovidethenumberofmembersauthorizedtotravel.Further,Districtofficialsdidnotattachproof of completion or training certifications,where applicable, tosupport travel expenditures.

Travel-Related Charges in 2012 – During 2012, District officialscharged138travel-relatedexpensestotaling$21,021.Ofthese,48chargestotaling$9,516werenotsupportedbyreceipts.Anadditional12charges totaling$938were supportedby receipts thatwerenotitemized.

ManyoftheseunsupportedclaimswererelatedtoatriptoLaughlin,Nevada for a conference7 which the Board authorized three members to attend for training purposes from October 15 through October18, 2012. The District’s credit cards were used to pay $7,182 inassociatedcharges.Seventeenchargestotaling$4,846weremissingreceipts,andotherchargeswereunauthorizedorquestionable.TheBoard resolution authorized payment of the registration costs (which included lodging) for threemembers, to include $600 for the firstregistrant and $500 for each additional registrant, plusmeals.Theresolutionrequiredtheattendeestopayfortheirowntransportation,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


The District paid $2,100 for four registrations to this conference,ratherthan$1,600for threeasauthorized.Ourreviewshowedthatthree 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$1,650fortwoairlinechargeswithnothingattachedtotheclaimtosupportthecharges,andtheclaimdidnotindicatethetravelers’namesordestinations.Further,whiletheBoardresolutionindicatedthatparticipantsshouldpayfortheirowntravel,onlyoneindividualreimbursed $412 of the $1,650. Finally, there were no trainingcertificatesor proofof completionwith the claimsor inpersonnelfiles toshowthat trainingwascompletedat thisconference.Otherquestionablechargesincluded:

• Twochargestotaling$395appeartobeforlodgingataLasVegas hotel after the conference, but the chargeswere notsupported by receipts or authorized by Board resolution.

• Onechargeof$134,supportedbyareceiptandsignedforbyachief,wasforahotelroomlocatedonehalfmilefromtheconference 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 withreceiptsbutpredatedtheconference.Forexample,onechargeof$417fordinnerataLasVegasrestaurantoccurredtwodaysbefore the start of the conference.

Travel-Related Charges in 2013 – During 2013, District officialsincurred 100 travel-related charges totaling $21,277. Of these,32 charges totaling $6,915 were not supported by receipts. Forexample,officialspaid$2,953forregistrationandairfarerelatedtoaconference,withoutanysupportattachedtotheclaim.Inaddition,no receipts were provided for hotel charges related to a Baltimore conventionandfortripstoVerona,SaratogaandAlbany,NewYork,totaling$1,951.

Travel-RelatedChargesin2014–During2014,officialsincurred83travel-relatedchargestotaling$18,866,ofwhich31chargestotaling$4,697werenotsupportedbyreceipts.Forexample,Districtofficialsdidnotsubmitfivereceiptstotaling$2,351forhotelchargesrelatedtoa2014BaltimoreconventionandforconferencesinAlbanyandRochester,NewYork.Additionally,noreceiptswereattachedto$79inclaimsforfoodattheAlbanyconference.


By not ensuring that all travel is authorized by the Board and properly supported, District officials did not enforce their own policy oradheretoGML.Asaresult,Districtcreditcardshavebeenusedforunsupportedpurchases,andthereislimitedassurancethatallchargeswereactual,necessaryandreasonableexpensesoftheDistrict.

Generally, meals are considered a personal expense unless theDistricthasofficialbusinessthatmustbeconductedduringatypicalmealtime. These situations could include Board meetings, worksessions or othermeetings attendedbyDistrict officials outside oftheirworkareaforextendedperiodsoftime,oreventsthatpreventDistrict volunteers or other personnel from taking time off to eat during mealtime.Accordingly,whentheBoarddeterminesitisappropriateto permit expenditures formeals or refreshments,District officialsincurring these expenditures must maintain sufficient supportingdocumentation 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 areactualandnecessarybyrequiringsufficientsupportforthecharges,and ensure that charges are reasonable.

TheBoardhasnotadoptedapolicyformealsandrefreshments.Whilethe District’s credit card policy includes constraints on meal charges duringnon-localtravel,itdoesnotaddressmealsandrefreshmentspurchasedwithinthelocalarea.DuringtheperiodJanuary1,2012throughFebruary28,2015,Districtofficialsincurred180mealandrefreshmentchargestotaling$22,290usingtheirDistrict-issuedcreditcards.Ofthisamount,theDistrictdidnothaveadequatesupportfor147chargestotaling$18,196.Forexample:

• Seventy-fourchargestotaling$8,204werenotsupportedbyitemized receipts attached to the claims vouchers.

• Twenty-four charges totaling $2,227 could be attributed toDistrict business such asBoardmeetings,work sessionsorothermeetings attended byDistrict officials, but therewasno documentation to indicate the need to expend funds for ameal.Forexample,acreditcardwasusedtocharge$106fortwoindividualsatalocalrestaurantat9:00p.m.withthenotation“Chiefsmeeting”onthereceipt.Whiletheindividualusingthecardwasachief,itwasnotevidentwhothesecondindividual was or why a meal was necessary.

• Thirty-six meal charges totaling $6,494 were attributed8 to trainingevents.Whileall thesechargeshad receipts,not

8 Tracedfromvariousrecords:creditcardstatements,receiptsorsign-insheets

Meals and Refreshments


allwere supported by an official training record or sign-insheet. 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 apolicyformealsandrefreshments,itwasnotclearwhetherthese were necessary charges.

• Thirteen miscellaneous charges totaling $1,271 could betraced to receipts but could not be tied to District-sponsored events.

Without written policies and procedures for credit card userequirements and without effective monitoring by the Board,the District will continue to be at risk of paying for inappropriate purchases.

TheBoardshould:

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, necessaryand reasonable charges supported by itemized receipts and consider developing a travel voucher or expense report to document,organizeandaccountfortravel-relatedcharges.

6. Investigatethequestionablechargesidentifiedinthisreportand seek reimbursement where appropriate.

7. Requiretravelerstoprovidedocumentationoftraining,suchastrainingcertificates,forallappropriatetravelexpenditurescharged 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.

TheTreasurershould:

9. Ensure that sufficient supportingdocumentation is attachedto each claim that is submitted to the Board for audit and payment approval.

Recommendations


APPENDIX A

RESPONSE FROM DISTRICT OFFICIALS

TheDistrictofficials’responsetothisauditcanbefoundonthefollowingpages.


APPENDIX B

AUDIT METHODOLOGY AND STANDARDS

The objectives of this audit were to review processes and procedures over the District’s cash investmentsandcreditcardsfortheperiodJanuary1,2014throughFebruary28,2015.DuetoalackofcontrolsoverDistrictcreditcarduse,weextendedourscopeperiodbacktoJanuary1,2012forfurther examination of credit cards. To accomplish the objectives of this audit and obtain valid audit evidence,ourproceduresincludedthefollowing:

• WereviewedtheDistrict’sinvestmentpolicytodeterminethetypesofinvestmentsforwhichthe District set aside cash and for what purpose.

• WereviewedtheDistrict’sinvestmentaccountstatementsandcashaccountagreementswiththefirmtoascertainthecompositionoftheinvestmentsandtodeterminewhoheldauthorityto invest funds on behalf of the District.

• We researched relevant legal provisions to determine if the District’s investments wereappropriately invested in a bank or trust company authorized to do business in the State.

• Wereviewedapplicablepolicies,suchasthefinancialpolicies,travelpoliciesandcreditcardpolicy,todetermineiftheDistrictcompliedwithitsinternalpolicies.

• We interviewedDistrict officials, such as Boardmembers and the Treasurer, to obtain anunderstandingofthecontrolenvironmentovercreditcarduse,theauditofcreditcardclaimsand accountability over expenses charged on credit cards.

• Weobtained37creditcardclaimvouchers,containing37creditcardstatementspaid fromJanuary1,2012throughFebruary28,2015,fromclaimvoucherpacketsanddeterminedifeach of the District’s claim vouchers had appropriate supporting documentation for all credit card charges in the form of itemized receipts.

• WereviewedthecreditcardclaimvoucherstodeterminewhentheBoardmembersauditedeach claim and compared the dates to the dates of payment made by the Treasurer.

• Wereviewedchargestodeterminetheirnatureandseparatedthetravel-relatedchargesfromcharges for meals and refreshments.

• Wereviewedtravelchargesforadequatesupport.WeexaminedBoardminutestodetermineiftheBoardauthorizedtripspriortotheevent,andwerequestedandexaminedsupplementarydocumentationsuchastrainingcertificatesorproofofcompletionfortheseevents.

• Wereviewedmealandrefreshmentchargesmadeinthelocalareaforadequatesupport.Wedetermined if these charges were for business purposes by analyzing documentation available with theclaimsvouchers,suchascreditcardstatementsand itemizedreceipts, toascertain


whether the charges were actual, necessary and supported.We also looked for guest listsattachedtothereceiptstodetermineifDistrictofficialswerehavingthemeal.

• Wereviewedsupplementarydocumentation,suchassign-insheetsorattendancerosters, totracedates,times,locationsandattendeesoftrainingtothedates,timesandlocationsofthemeals.Ifachargecouldnotbetracedtoastatedpurpose,wereviewedsign-insheetstoassistin our determination of a business purpose behind the meal charges and the reasonableness of those charges.

WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperformtheaudittoobtainsufficient,appropriateevidencetoprovideareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.Webelieve that theevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.


APPENDIX C

HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT

OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/

Toobtaincopiesofthisreport,writeorvisitourwebpage:


APPENDIX DOFFICE OF THE STATE COMPTROLLER

DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller

GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller

LOCAL REGIONAL OFFICE LISTING

BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]

Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties

BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]

Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties

GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOne Broad Street PlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]

Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties

HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]

Serving:NassauandSuffolkCounties

NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]

Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties

ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThe Powers Building16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]

Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties

SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]

Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties

STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313

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