2007 (2)
RECEIVED
JUL 0 2 2008
TOWN CLERK
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED DECEMBER 31.2007
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
TABLE OF CONTENTS
FOR THE YEAR ENDED DECEMBER 31.2007
DESCRIPTION
PAGE(S)
Independent Auditors' Report........................ ..................................................................................1
Schedule of Findings and Recommendations .... ......... .............. ................................. ......... ......... 2-4
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Beechwood Office Park
267H SouTh Road
Poughkeepsie, NY 1260 I
SEDORE & COMPANY
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845.897.1040
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To the Members of the Board
of Fire Commissioners
Hughsonville Fire District
Hughsonville, New York
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In planning and performing our audit of the financial statements of the Hughsonville Fire
District, Hughsonville, New York for the year ended December 31,2007, 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 I.
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.
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June 11,2008
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Large Firm Expertise,.., Local Firm Service
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED DECEMBER 31.2007
SECTION I - SIGNIFICANT DEFICIENCY:
Findin21 - Fixed Assets:
The District has not taken adopted a capitalization policy. Also, 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.
Findin2 1 - Cash Disbursements
A) Findin2:
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, six
purchases required obtaining quotes, however documentation supporting the quotes was
not available.
2
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D.)
FOR THE YEAR ENDED DECEMBER 31.2007
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) Findin2:
5 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 ofthe Fire District's purchases.
Findin2 2 - 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 General Fund showed expenditures and incurred a deficit for the year which
reflected cash transactions in the following year.
3
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D.)
FOR THE YEAR ENDED DECEMBER 31.2007
Cause:
The General Fund did not have sufficient revenues to cover the transfers.
Recommendation:
The District should only record transfers when the funds are moved to the appropriate
accounts.
4