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.
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