2008
~
~" .'
&9 ~~ ~~
~ .."~ ~/
, ,~' ~c,
'S ~~
~
"
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED DECEMBER 31.2008
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
TABLE OF CONTENTS
FOR THE YEAR ENDED DECEMBER 31.2008
PAGE(S)
DESCRIPTION
Independent Auditors I Report.............................. ............................................................................1
Schedule of Findings and Recommendations .................... ............................. ...... ............ ........... 2-4
~~ SEDORE
HUDSON VALLEY ePAs
Partners
Jumes L Sedore, ,Ii, CPA
Murll S. O'Sllll/uUII, CPA
James F Leller/u, ,Ii , CPA
Lilldo M HUIIII/gulI, CPA
Kurell T HUllsell, CPA
.ferlrev L. BroWII, CPA
ClwrJes N. Ruc, .II', CPA
Navigating YcJUr Success
To the Members of the Board
of Fire Commissioners
Hughsonville Fire District
Hughsonville, New York
In planning and performing our audit of the financial statements of the Hughsonville Fire
District, Hughsonville, N ew York for the year ended December 31, 2008, we considered
its internal control structure in order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and not to provide assurance on
internal control. Accordingly, we do not express an opinion on the effectiveness of the
District's internal control.
However, we noted matters involving internal control and its operation that we consider
to be a significant deficiency under standards established by the American Institute of
Certified Public Accountants. Significant deficiencies involve matters coming to our
attention relating to the design or operation of internal control that, in our judgment,
could adversely affect the Organization's ability to initiate, record, process, summarize,
and report financial data consistent with the assertions of management in the financial
statements. The significant deficiency is summarized in Section 1.
During our audit we became aware of matters that are opportunities for strengthening
internal controls and operating efficiency. Although most of these comments were cited
in last year's report and we note that the District had limited time to implement our
recommendations, we wish to continue to bring them to the District's attention.
The schedule that accompanies this letter summarizes our findings and recommendations
regarding those matters.
We will review the status of these comments during our next engagement. We have
previously discussed many of these comments and suggestions with District personnel,
and we will be pleased to discuss them in further detail, at your convenience, and to .
perform any additional study of these matters, or to assist you in implementing the
recommendations.
This report is intended solely for the information and use of the Board of Directors,
management, and staff, and is not intended to be and should not be used by anyone other
than these specified parties.
~~ '1- Ccny7' C/;1. S
Poughkeepsie, New York
July 25, 2009 Poughkeepsie Office
2678 South Road I Suite 101 I Poughkeepsie, New York 12601
Tel: (845) 485-5510 I Fax: (845) 485-5547 I Email: inlo@sedoreco.com I Web: www.sedoreco.com
POUGHKEEPSIE. PORT JERVIS. FISHKILL
1
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED DECEMBER 31. 2008
SECTION I - SIGNIFICANT DEFICIENCY:
Findinl!: 1- Fixed Assets:
The District has not taken a recent physical inventory which is then related to its
accounting records.
Effect:
The District's ability to monitor the existence and location of its assets is limited.
Cause:
The District does not maintain a detailed list of its fixed assets. Inventory listings do not
include cost and are not related to its accounting records.
Recommendation:
The District should maintain an asset listing of all capital assets which contains the
following information: date of acquisition, cost basis, estimated useful life, depreciation
expense, and accumulated depreciation to date. In addition, the District should perform a
periodic physical inventory of all of its capital assets.
SECTION 11- OTHER FINDINGS:
The following represents other matters, which we are bringing to the attention of
Management.
Findinl!: 2 - Cash Disbursements
A) Findinl!::
During our test of cash disbursements, we noted that some of our selections required
written quotes or bid documentation, however written documentation was not always
available.
Cause:
Bid documentation was not always retained. In our sample of 25 transactions, five
purchases required obtaining quotes or bids, however documentation supporting the
quotes or bids was not available.
2
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D.)
FOR THE YEAR ENDED DECEMBER 31. 2008
Effect:
The District is not able to document that it followed its purchasing policy and paid the
appropriate amounts.
Recommendation:
The District should document obtaining quotes, including noting firms and individuals
contacted, the date and amount quoted.
B) Findill!~::
Five of the 25 selections did not have purchase orders included with the supporting
documentation.
Cause:
The District was not using purchase orders consistently.
Effect:
The Hughsonville Fire District procurement policy mandates that a purchase order must
be filled out and given to the Treasurer for any purchase made for the Fire District.
Neglecting to fill out a purchase order directly violates the Fire District's procurement policy
and also leaves open a window of opportunity for misappropriation of assets.
Recommendation:
The Fire District should ensure that all invoices have a purchase order attached with the
proper authorization in order to facilitate compliance with the procurement policy and
to create better oversight of the Fire District's purchases.
Findin2 3 - Interfund Transfers
During our audit, we noted that there were transfers recorded between the General Fund
and Capital Reserves, however cash was not moved.
Effect:
The District has authorized transfers for which cash was not available to cover the
movement of cash until the following year. The recording of these transfers has created
a deficit fund balance amounting to ($55,882) as of December 31,2008.
3
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D.)
FOR THE YEAR ENDED DECEMBER 31.2008
Cause:
The General Fund did not have sufficient revenues to cover the transfers.
Recommendation:
The District should only authorize transfers when the funds are available to be moved
to the appropriate bank accounts.
Findine: 4 - Accounts Payable
During our audit, we noted that there were no Accounts Payable and subsequently
recorded $35,512 in outstanding liabilities.
Effect:
The District's General Fund expenditures were understated and ending fund balance
overstated.
Cause:
Certain invoices paid in January for liabilities incurred in December were considered
encumbrances but not accounts payable, and therefore not reflected in the District's
2008 expenditures.
Recommendation:
The District should record all invoices for goods and services received in the current
year but paid for in the future year as accounts payable. Encumbrances should reflect
only those goods or services ordered but not received current year.
4
~SONlt/((<<,
~-0~."'""'~"''''''
.. J .
\)U1Cf\l.~~;~':' C:\'l
NfX:'1'C1R\,
1f U{Jlisonvi[[e pire C])istrict
P.O. C}3ox..545 - rTown ofrWappinger
J{ugfisonvi{(e, :New r{ork)2537
-
~.HFD45.0m
~\fetts St[0I14 1~'ednu,{t1y
Q/ wfi ~"ontJi
'lef: (845) 297-4194
'Fax; (845) 297-4560
~rd of Fire CommissioneIli
Ronald P. Andrews - Chairman
Joseph DiPressi - Deputy Chairman.
Mark Liebermann - Robert Scott BostwiCk
Jason Morse Sr.
Glenn M. Kramer - Chief of Department
Bruce M. Flower - 1" Assistant Chief
Timothy N. Laffin - 2nd Assistant Chief
September 22, 2009
Re: District response to Year Ended December 31 , 2008 Audit
Section I
Finding: 1 _ Fixed Assets . . d' f
The IJistrict has not taken a recent physical inventory wluch IS then relate to ItS accOUll mg
records.
District ResDonse .
The flfematic officers do an annual inventnry of all the equIpment on the flfe apparatus and have
that inventory in their records. A procedure to have the inventory un file with the District
Secretary will be pursued.
Section II
Finding: 2A - Cash Disbursements
During our test of cash disbursements, we noted that some of the selections required written
quotes or bid documentation, however written documentation was not always available.
District ResDonse
The district has instituted a worksheet to document when bids and quotes (either written or
verbal) are needed. This worksheet was approved late in the year.
Finding: 2A - Cash Disbursements
Five of the 25 selections did not have purchase orders included with the supporting
documentation.
District ReSDonse
According to the District's policy not all Payment Vouchers require a purchase order. We will
review the Vouchers that were flagged and institute new procedures.
..
Findine 3 - Interfund Transfers
During our audit, we noted that there were transfers recorded between the General Fund and
Capital Reserves, however cash was not moved.
District Response
Transfers are recorded after they funds have been moved from the General Fund to the Reserve
Funds. I will be consulting with the auditors to understand the reason for their finding.
Findine 4 - Accounts Payable
During our audit, we noted that there were no Accounts Payable and subsequently recorded
$35,512 in outstanding liabilities.
District Response
All the encumbered funds were for orders that had been placed in 2008 but had not been received
by the end of the year. The method that the district accounts for the encumbered funds will be
reviewed and modified to be better reflect standard accounting practices.
Respectfully submitted,
~ ~~-;;f
Michael Schappert
Treasurer
Hughsonville Fire District