On January 9 the New York State Comptroller issued an audit on the Plattekill Fire Department, analyzing the management of their internal financial operations from Jan. 1, 2013 through Jan. 14, 2014. Throughout the 21 page audit the Comptroller repeatedly highlighted the fire department’s lack of proper accounting, recording keeping and monitoring of their finances and warned that this “increases the risk that errors and irregularities could occur and remain undetected and uncorrected.”
The Plattekill Fire District’s two firehouses cover 23 sq/miles and serve 16,900 residents in the Town of Plattekill and a portion of the Town of Newburgh. The audit states that the Board of Fire Commissioners is responsible for managing the district’s overall finances and record keeping.
The audit states that the department treasurer is responsible for accounting of the district’s funds and for keeping the board apprised of the district’s financial position. It notes that the treasurer collected 15 receipts totaling $1,362,710 in 2013 but failed to issue press numbered duplicate receipts or record the dates in which the cash or checks were received.
Additionally, the treasurer did not deposit receipts collected in a timely manner, failed to compile bank reconciliations for the first 9 months of 2013, however when finally completed were accurate, and submitted late and inaccurate reports to the board of fire commissioners. In addition, the treasurer did not provide the board with the district’s financial activities at their annual organization meeting “because the board did not require her to do so.” The board informed the Comptroller that they relied upon their external auditor’s annual audit and the treasurer’s monthly report. The Comptroller pointed out, however, that besides the treasurer submitting late monthly reports, they also contained errors.
The Comptroller stated that the fire commissioners did not audit of their own vouchers and failed to ensure that all of the claims were permissible district expenses. The fire commissioners also did not select many of their professional service providers through a competitive bidding process; particularly three providers who were paid $15,297 in 2013. The audit broke out these expenses; $12,355 for general legal counsel, $2,120 for map surveying services and $822 for legal services relating to a personal injury case.
The district did not obtain the required number of quotations for 10 purchases totaling $23,921, as required under General Municipal Law, nor have written contracts with all providers.
The audit notes that when questioned, “District officials were unable to provide an explanation or documentation as to why they did not use a competitive process to select the other vendors or why they did not enter into written contractual agreements with the service providers.”
The audit states that the department has an established procurement policy that requires 3 written quotations or written proposals for purchases up to $500 and for purchases from $501 to $9,999 there must be board approval, a purchase order and 3 written/faxed quotations. The Comptroller reviewed 11 purchase orders totaling $42,619 issued in 2013 and found that “all had one or more deficiencies.” The board failed to formally approve the purchase contract awards for 10 purchases totaling $40,499; ten purchases totaling $23,921 did not have the required number of quotations; nine purchases totaling $41,194 were not pre-approved by the board; two purchases totaling $20,819 had payments exceeding the amounts the board approved and one purchase of $4,500 had no board approval.
The treasurer stated that she handles quotes for non-fire equipment and “that the purchase deficiencies occurred because she was not adequately trained for the treasurer position, including handling district purchases.”
The audit highlights the fact that the fire district’s own financial report for 2012 found that the district had failed to comply with their own procurement policy by obtaining the required number of quotations. The Fire District was required by law to prepare a written corrective action plan within 90 days that would address the 2012 findings but failed to do so. The audit notes that Fire District Board Chairman James Hoppenstedt Sr. said his board had discussed the 2012 discrepancies but he “was unable to provide a specific reason for why district officials did not prepare a written corrective action plan.”
The Comptroller’s audit took notice that in 2013 the district purchased $1,716 from Hoppenstedt’s general store. The audit states that this may not be prohibited if Hoppenstedt had abstained from voting on vouchers for items purchased at his store. However, “because the district does not create or certify abstracts for payments made to vendors, we were unable to determine if he abstained from voting on this payment.”
The audit points out that due to a lack of careful oversight, “district officials have no assurance that goods and services are procured in the most prudent an economical manner, goods and services of desired quality are being acquired at the lowest possible prices and procurement is not influenced by favoritism, extravagance, fraud or corruption.”
The audit contains an attached letter from Hoppenstedt, dated Dec.12, 2014, acknowledging that his board is in agreement with the findings. He wrote that the department has started the process of “implementing measures to improve the internal controls over our financial operations” as is outlined in the audit. He promised that the district’s corrective action plan will follow.