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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED
DECEMBER 31.2010
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NOV 1 5 2011
TOWN OF WAPPINGER
TOWN CLERK
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
TABLE OF CONTENTS
DECEMBER 31.2010
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DESCRIPTION
P AGE(S)
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Independent Auditors' Report ...................................................................................................... 1-2
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Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in
Accordance with Government Auditing Standards ................................................................... 3-4
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Management's Discussion and Analysis (unaudited)
F or The Year Ended December 31, 2010. . . . . . . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . .. . .. .. . . . . . . . . . . . . ...... 5 - 7
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BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
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Statement of Net Assets - December 31, 2010................................................................................8
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Statement of Activities - For The Year Ended
December 31, 2010 ... ............................................................................... ....................................9
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Fund Financial Statements:
Balance Sheet - Governmental Funds - December 31, 2010........................................................10
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Reconciliation of Governmental Funds Balance Sheet
To The Statement of Net Assets - December 31,2010 ..............................................................11
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Statement of Revenues, Expenditures and Changes
In Fund Balances- Governmental Funds -
For the Year Ended December 31, 2010.......... ................... .................................................... ....12
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Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities - For the Year Ended December 31, 2010............................................13
Statement of Net Assets - Fiduciary Funds - December 31, 2010............................................. ...14
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5, Statement of Changes in Net Assets - Fiduciary Funds - December 31,2010.............................15
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Notes to the Financial Statements............................................................................................ 16-26
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REQUIRED SUPPLEMENTAL. INFORMATION SECTION:
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Exhibit I
Schedule of Revenues, Expenditures and Encumbrances -
Budget and Actual General Fund - For the Year Ended
December 31, 2010 ...................................................... ......... ................................................... ..27
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~~ SEDORE
Partners
James LSedore,Jr., CPA
Mark S O'Sullivan, CPA
James F Letter/o,Jr., CPA
Linda M Hannigan, CPA
Karen T Hansen, CPA
Jeffrey L Brown, CPA
Charles R. Rae, Jr., CPA
HUDSON VAllEY CPAs
Navigating Your Success
INDEPENDENT AUDITORS' REPORT
To the Members of the Board
of Fire Commissioners
Hughsonville Fire District
88 Old Hopewell Road
Hughsonville, New York 12537
We have audited the accompanying financial statements of the governmental activities, each major
fund and the remaining fund information of the Hughsonville Fire District, Hughsonville, New York
as of December 31, 2010, and for the year then ended which collectively comprise the District's
basic financial statements as listed in the foregoing Table of Contents. These financial statements
are the responsibility of the Hughsonville Fire District, Hughsonville, New York's management.
Our responsibility is to express an opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America, and the standards applicable to financial audits contained in the Government
Auditing Standards issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the governmental activities, each major fund and the remaining fund
information of the Hughsonville Fire District, Hughsonville, New York, as of December 31, 2010,
and the respective changes in financial position for the year ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated August
30, 2011 on our consideration of the Hughsonville Fire District's, Hughsonville, New York,
internal control over financial reporting and our tests of its compliance with certain provisions of
laws, regulations contracts and grant agreements and other matters. The purpose of that report is
to describe the scope of our testing of internal control over financial reporting and compliance and
the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Poughkeepsie Office
2678 South Road I Suite 101 I Poughkeepsie, New York 12601
Tel: (845) 485-5510 I Fax: (845) 485-5547 I EmaiI: info@sedoreco.com [ Web: www.sedoreco.com
POUGHKEEPSIE · PORT JERVIS · FISHKILL 1
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Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis and Exhibit I, budgetary comparison information, be
presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in
an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
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Poughkeepsie, New Yark
August 30, 2011
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Partners
James L. Sedore, Jr., CPA
Mark S. O'Sullivan. CPA
James F Letteria, Jr:. CPA
Linda M Hannigan. CPA
Karen T Hansen, CPA
Jeffrey L. Brown, CPA
Charles R. Rae. Jr. CPA
HUDSON VAllEY CPAs
Navigating Your Success
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Members of the Board
of Fire Commissioners
Hughsonville Fire District
88 Old Hopewell Road
Hughsonville, New York 12537
We have audited the accompanying financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information financial statements of the Hughsonville Fire
District, Hughsonville, New York as of and for the year ended December 31, 2010, which
collectively comprise the District's basic financial statements and have issued our report thereon
dated August 30, 2011. We conducted our audit in accordance with generally accepted auditing
standards and the standards applicable to financial audits contained in the Government Auditing
Standards issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Hughsonville Fire District's internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements but not for the purpose of expressing an
opinion on the effectiveness of the Hughsonville Fire District's internal control over financial
reporting. Accordingly, we do not express an opinion on the effectiveness of the District's
internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis.
Our consideration over internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies, or
material weaknesses. We did not identify any deficiencies in internal control over financial
statement reporting that we consider to be material weaknesses, as described above. However, we
identified certain deficiencies in internal control over financial reporting, described in the
accompanying Schedule of Findings and Responses that we consider to be significant deficiencies
in internal control over financial statement reporting. A significant deficiency is a deficiency is a
deficiency, or a combination of deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit attention by those charged with governance.
Poughkeepsie Office
2678 South Road I Suite 101 I Poughkeepsie, New York 12601
Tel: (845) 485-5510 I Fax: (845) 485-5547 I Email: info@sedoreco.com I Web: www.sedoreco.com
POUGHKEEPSIE. PORT JERVIS · FISH KILL
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Compliance and Other Matters
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As part of obtaining reasonable assurance about whether the Hughsonville Fire District's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance that is required to be reported under Government Auditing Standards.
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We noted certain immaterial instances of noncompliance that we have also reported to
management ofthe Hughsonville Fire District in a separate letter dated August 30, 2011.
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The Hughsonville Fire District's response to the findings identified in our audit is included in the
separate letter described above. We did not audit the District's response and, accordingly, we
express no opinion on it.
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This report is intended solely for the information and use of the Board of Fire Commissioners and
is not intended to be and should not be used by anyone other than these specified parties.
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Poughkeepsie, New York
August 30, 2011
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS-UNAUDITED
DECEMBER 31.2010
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The following "Management's Discussion and Analysis" report (MD&A) provides the reader with
an introduction and overview to the financial activities and performance of the Hughsonville Fire
District for the year ended December 31, 2010, as mandated by GASB #34. This information should
be reviewed in conjunction with the audited financial statements of the District.
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These audited financial statements consist of five parts: The Independent Auditors Report on our
financial statements, Managements Discussion and Analysis, Government Wide Financial
Statements, Fund Financial Statements, and Notes to the Financial Statements. The Government
Wide Financial Statements provide long and short term information about the District's overall
financial status. Our analysis of the District's major funds begins on page 7. The fund financial
statements provide detailed information about the most significant funds. Some funds are required
to be established by State law.
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FINANCIAL POSITION SUMMARY
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Net Assets serve as an indicator of the District's financial position. The District's Assets exceeded
liabilities by $1,323,700, an increase of$36,123 over December 31,2009. This differs from fund
balance in that fixed assets are added and bonded debt is deducted. Total assets amounted to
$2,039,279, including net fixed assets of$I,835,024. Assets amounted to $2,121,323 at the end of
2009, having decreased by $82,044. Liabilities amounted to $715,579, of which $130,469 was due in
one year or less and $585,110 is due after one year, representing a decrease of $22,484 over 2009
resulting from payments on long term debt. Total revenues amounted to $741,849, with real
property taxes of $ 7 40,936 being the most significant. Revenues increased $1,928 over 2009 mostly
due to an increase in property tax revenue. Expenses amounted to $705,726 with expenses for public
safety of $672,804 being the most significant. Net assets increased by $36,123 for the year from
operations.
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The following is a summarized comparative description of the District's assets, liabilities and net
assets for the years ended December 31, 2010 and 2009.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS-UNAUDITED (CONT'D.)
DECEMBER 31.2010
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Governmental
Activities
2010 2009
$ 204,255 $ 430,021
1,835,024 1,691,302
$ 2,039,279 $ 2,121,323
$ 130,469 $ 226,151
585,110 607,594
715,579 833,745
1,216,326 1,255,160
107,374 32,418
1,323,700 1,287,578
$ 2,039,279 $ 2,121,323
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Cash and cash equivalents
Fixed assets
Total Assets
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CtnTent liabilities
Non-ctnTent liabilities
Total liabilities
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Invested in Capital Assets, net of related debt
Unrestricted net assets
Total net assets
Total liabilities and net assets
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Change
$
(225,766)
143,722
(82,044)
$
$
(95,682)
(22,484)
(118,166)
$
(38,834)
74,956
36,122
(82,044)
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS-UNAUDITED (CONT'D.)
DECEMBER 31.2010
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Governmental
Activities
Year Ended December 31,
2010 2009
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Program Revenues
Grants and contributions
General revenues
Property taxes
Interest Earnings
Other revenues
Total revenues
$ $ 19,217 $ (19,217)
740,936 719,143 21,793
913 1,418 ( 505)
143 (143)
741,849 739,921 1,928
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Expenses
Public safety
Interest
Total expenses
672,804
32,922
705,726
607,601
33,536
641,137
65,203
(614)
64,589
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Increase (decrease) in net assets
$
36,123
$
98,784
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(62,661 )
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For details of the District's finances, see the accompanying financial statements and Notes thereof.
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GENERAL FUND
There was an increase in Fund Balance in 2010 of $18,515 from operations.
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Real property taxes increased by $21,793 in 2010. This was due to an increase in the District's tax
levy to cover fire services provided to the community.
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The District completed a new building in 2010, for a total cost of $311,418. Total capitalized
equipment purchases amounted to $99,160. Total vehicle purchases amounted to $90,000.
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FINANCIAL STATEMENTS
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The District's financial statements are prepared in accordance with generally accepted accounting
principles, as promulgated by the Governmental Accounting Standards Board (GASB). The District
is structured as governmental funds. See the accompanying Notes to the Financial Statements.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
STATEMENT OF NET ASSETS
DECEMBER 31. 2010
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GOVERNMENTAL
ACTIVITIES
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ASSETS
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Current Assets:
Cash and cash equivalents
Restricted cash
Total Current Assets
$
153,309
50,946
204,255
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Capital Assets
Buildings, Vehicles and equipment, net of accumulated depreciation
of $1,134,416
Total Capital Assets
1,835,024
1,835,024
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$ 2,039,279
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Total Assets
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LIABILITIES
Current Liabilities:
Accounts payable $ 2,358
Accrued interest 17,489
Service Award Program contributions payable 26,088
Current Portion of Long- Term Liabilities:
Obligations under capital lease 33,257
Bonds and notes payable 51,277
Total Current Liabilities 130,469
Non-Current Liabilities:
Obligations under capital lease 454,337
Bonds and notes payable 130,773
Total Non-Current Liabilities 585,110
Total Liabilities 715,579
NET ASSETS
Invested in Capital Assets, net of related debt 1,216,326
Unrestricted 107,374
Total Net Assets 1,323,700
Total Liabilities and Net Assets $ 2,039,279
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The accompanying Notes to the Financial Statements
should be read in conjunction with these Financial Statements.
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FUNCTIONS/PROGRAMS
Governmental Activities:
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Public Safety
Interest
Total Governmental Activities $
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31,2010
OPERATING
GRANTS AND
EXPENSES CONTRIBUTIONS
$
672,804
32,922
$
705,726
$
General Revenues
Taxes:
Real Property Taxes
Unrestricted Investment Earnings
Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
The accompanying Notes to the Financial Statements
should be read in conjunction with these Financial Statements.
NET (EXPENSE) REVENUE
AND CHANGES IN
NET ASSETS
GOVERNMENTAL
ACTIVITIES
$
(672,804)
(32,922)
(705,726)
740,936
913
741,849
36,122
1,287,578
$
1,323,700
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31. 2010
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GENERAL
FUND
CAPITAL
PROJECTS
FUND
TOTAL
GOVERNMENTAL
FUNDS
ASSETS
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Cash and cash equivalents
Restricted cash
Due from other funds
$ 153,309
$
$
153,309
50,946
23,629
50,946
23,629
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Total Assets
$ 176,938
$
50,946
$
227,884
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LIABILITIES AND FUND EQUITY
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LIABILITIES
Accounts payable
Due to Other Funds
$
2,358
$
$
2,358
23,629
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23,629
Total Liabilities
2,358
23,629
25,987
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FUND EQUITY
Fund Balance (Deficit):
Reserved for:
Capital 27,318 27,318
Encumbrances
Undesignated 174,580 174,580
Total Fund Equity 174,580 27,318 201,897
Total Liabilities
and Fund Equity $ 176,938 $ 50,946 $ 227,884
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The accompanying Notes to the Financial Statements
should be read in conjunction with this Financial Statement.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
DECEMBER 31. 2010
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Total Fund Equity for Governmental Funds
$
201,897
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Total Net Assets Reported for Governmental Activities in the Statement
of Net Assets are Different Because:
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Capital assets used in governmental activities are not
financial resources and therefore are not reported in the funds.
1,835,024
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Current service award liabilities and long-term liabilities,
including bonds payable are not due and payable
in this period and therefore are not reported in the funds.
(695,732)
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Accrued interest is not reported in the funds.
(17,489)
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Total Net Assets of Governmental Activities
$
1,323,700
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The accompanying Notes to the Financial Statements
should be read in conjunction with this Financial Statement.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31. 2010
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CAPITAL TOTAL
GENERAL PROJECTS GOVERNMENTAL
FUND FUND FUNDS
REVENUES
Real Property Taxes $ 740,936 $ $ 740,936
Other Payments In Lieu of Taxes
Use of Money and Property 832 81 913
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Total Revenues 741,768 81 741,848
EXPENDITURES
Public Safety 628,894 108,625 737,519
Employee Benefits 79,363 79,363
Debt Service 104,996 104,996
Total Expenditures 8 I 3,253 108,625 921,877
Excess of Revenues Over Expenditures (71,485) (l 08,544) (180,031)
Other Financing Sources:
Proceeds of Debt 62,050 62,050
Operating transfers in 90,000 90,000
Operating transfers out (90,000) (90,000)
Total Other Financing Sources 90,000 (27,950) 62,050
Excess (Deficiency) of Revenue and Other Sources
Over Expenditures and Other Uses 18,5 I 5 (136,494) (117,981)
Fund Balance, December 31, 2009 156,065 163,812 319,877
Fund Balance, December 31, 2010 $ 174,580 $ 27,318 $ 201,897
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The accompanying Notes to the Financial Statements
should be read in conjunction with this Financial Statement.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31. 2010
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Net Change in Fund Equities - Governmental Funds
The Change in Net Assets reported for Governmental Activities in the
Statement of Activities is different because:
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Governmental funds report all capital outlays as expenditures.
However, in the statement of activities, the cost of certain assets
is allocated over their estimated useful lives and reported as
depreciation expense. This is the amount by which capital outlay
expense exceeded depreciation in the current period.
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In the statement of activities, the service award liability for the current
period is accrued, whereas in governmental funds, the required
annual contribution is reported when due.
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Bond proceeds are reported as financing sources in governmental
funds and thus contribute to the change in fund balance. In the
statement of net assets, however, issuing debt increases long-term
liabilities and does not affect the statement of activities. Similarly,
repayment of principal is an expenditure in the governmental funds
but reduces the liability in the statement of net assets.
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Proceeds of Debt
Repayments:
Bond Principal
Capital Lease Principal
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In the statement of activities, interest is accrued on outstanding
bonds, whereas in governmental funds, an interest expenditure is
reported when due.
$ (117,981)
143,723
356
(62,050)
40,000
33,257
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(1,183)
Net Change in Net Assets of Governmental Activities
$
36,122
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The accompanying Notes to the Financial Statements
should be read in conjunction with this Financial Statement.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
DECEMBER 31. 2010
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ASSETS
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Cash and Cash Equivalents
Investments
Contributions Receivable
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Total assets
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LIABILITIES
Liabilities
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Total liabilities
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NET ASSETS
Held in Trust for Service Award Program Benefits
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Net Assets
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TOT AL LIABILITIES AND NET ASSETS
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SERVICE
AWARD
PROGRAM
$
25,785
451,899
26,088
$
503,772
$
503,772
503,772
$
503,772
The accompanying Notes to the Financial Statements
should be read in conjunction with these Financial Statements.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
DECEMBER 31. 2010
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SERVICE
AWARD
PROGRAM
ADDITIONS
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Contributions
Investment Earnings
$
Total Additions
42,474
30,095
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72,569
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DEDUCTIONS
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Benefits
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Total Deductions
24,000
24,000
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Change in Net Assets
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Net Assets - January 1,2010
455,203
...
Net assets - December 31, 2010
$
503,772
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The accompanying Notes to the Financial Statements
should be read in conjunction with these Financial Statements.
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48,569
15
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31. 2010
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NOTE A - Summary of Accountin2 Policies
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The Hughsonville Fire District, Hughsonville, New York ("the District") was incorporated under the
provisions of the State'of New York. The District operates under a District Corporation form of
government, consisting of a Board of five Fire Commissioners. The Chairman serves as the Chief
Executive Officer and the Treasurer as the Chief Fiscal Officer of the District.
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The District provides fire protection medical services to residents and businesses of the Hughsonville
Fire District which is located in the Town of Wappinger, Dutchess County, New York.
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The financial statements of the District have been prepared in conformity with generally accepted
accounting principles (GAAP), as applied to government units. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles, some of which are as follows:
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1. The Reportin2 Entitv
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The District, for financial purposes, includes all of the funds and account groups relevant to
the operations of the Hughsonville Fire District, Hughsonville, New York. The financial
statements include organizations, functions and activities that are controlled by or dependent
upon the District. Control or dependence is determined on the basis of budget adoption,
taxing authority, funding and appointment of the respective governing board.
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2. Basic Financial Statements - Government-Wide Statements
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The District's basic financial statements include both government-wide (reporting the District
as a whole) and fund financial statements (reporting the District's major funds). Both the
government-wide and fund financial statements categorize primary activities as either
governmental or business type activities. The District's fire protection services and general
administrative services are classified as governmental activities.
l
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In the government-wide Statement of Net Assets, the governmental activities columns is
presented on a consolidated basis by column, and is reported on a full accrual, economic
resource basis, which recognizes all long-term assets and receivables as well as long-term debt
and obligations. The District's net assets are reported in three parts-invested in capital assets,
net of related debt; restricted net assets; and unrestricted net assets. The District first utilizes
restricted resources to finance qualifying activities.
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The government-wide Statement of Activities reports both the gross and net cost of each of
the District's functions or activities. The functions are also supported by general government
revenues (property taxes, certain intergovernmental revenues, and charges, etc.). The
Statement of Activities reduces gross expenses by related program revenues, operating and
capital grants. Program revenues must be directly associated with the function (public safety,
in the case of the District). Operating grants include operating-specific and discretionary
(either operating or capital) grants while the capital grants column reflects capital-specific
grants.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31.2010
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NOTE A - Summary of Accountine: Policies (Continued)
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The net costs are normally covered by general revenue (property taxes and interest income,
etc).
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This government-wide focus is more on the sustainability of the District as an entity and the
change in the District's net assets resulting from the current year's activities.
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3. Basic Financial Statements- Fund Financial Statements
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The financial transactions of the District are reported in individual funds in the fund financial
statements. Each fund is accounted for by providing a separate set of self-balancing accounts
that comprises its assets, liabilities, reserves, fund equity, revenues and
expenditures/expenses. Funds are organized into three major categories: governmental,
proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and
proprietary categories. A fund is considered major if it is the primary operating fund of the
District or meets the following criteria:
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a. Total assets, liabilities, revenues, or expenditures/expenses of that individual
governmental or enterprise fund are at least 10 percent of the corresponding total for all
funds of that category or type; and,
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b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental
fund or enterprise fund are at least 5 percent of the corresponding total for all
governmental and enterprise funds combined.
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The following fund types are used by the District:
L.
A. Governmental Funds
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The focus of the governmental funds' measurement (in the fund statements) is upon
determination of financial position and changes in financial position (sources, uses, and
balances of financial resources) rather than upon net income.
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The following is a description of the governmental funds of the District:
1. General Fund is the general operating fund of the District. It is used to account for
all financial resources except those required to be accounted for in another fund. The
General Fund is considered a major fund and is presented separately.
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2. Capital Projects Fund is used to account for financial resources to be used for
the acquisition or construction of major facilities or equipment.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31.2010
,
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L.
NOTE A - Summary of Accountin2 Policies (Continued)
l
B. Fiduciary Funds
,
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Fiduciary Funds are used to report assets held in a trustee or agency capacity for others
and therefore are not available to support District's programs. The reporting focus is on
net assets and changes in net assets and are reported using accounting principles similar to
proprietary funds.
1
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The District's fiduciary funds are presented in the fiduciary fund financial statements.
Since by definition these assets are being held for the benefit of a third party and cannot be
used to address activities or obligations of the government, these funds are not
incorporated into the government-wide statements.
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4. Basis of Accountin2
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Basis of accounting refers to the point at which revenues or expenditures/expenses are
recognized in the accounts and reported in the financial statements. It relates to the timing of
the measurements made regardless of the measurement focus applied.
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A. Accrual
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The governmental activities in the government-wide financial statements and fiduciary
fund financial statements are presented on the accrual basis of accounting. Revenues are
recognized when earned and expenses are recognized when incurred.
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B. Modified Accrual
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The governmental funds financial statements are presented on the modified accrual basis
of accounting. Under the modified accrual basis of accounting, revenues are recorded
when susceptible to accrual; i.e., both measurable and available. "Available" means
collectible within the current period or within 60 days after year-end. Expenditures are
generally recognized under the modified accrual basis of accounting when the related
liability is incurred. The exception to this general rule is that principal and interest on
general obligation long-term debt, if any, is recognized when due.
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5. Financial Statement Amounts
A. Budgets
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The District employs a formal budgetary accounting system as required by law. During
the year, a budget was adopted and modified by the Board for the General Fund.
However, for the Capital Projects Fund, budgets are established at the project level and
continue until the project is completed. Unused appropriations of the annually budgeted
funds lapse at the end of the year.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31.2010
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NOTE A - SummarY of Accounting: Policies (Continued)
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B. Cash and Investments
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Cash includes amounts in demand and time deposits, as well as, short-term investments.
State statutes and the District's own written investment policy govern the investment
policies of the District. Demand and time deposits, and certificates of deposit not covered
by Federal Deposit Insurance, must be collateralized by the banking institutions with
investments governed under state statutes.
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The cash and investments of the District at December 31, 2010, are as follows:
}
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GFNmAL CAPITAL PROJECTS
FlJND FlJND TOTAL
Interest Bearing
Accounts $ 153,309 $ 50,946 $ 204,255
TOTAL $ 153,309 $ 50,946 $ 204,255
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Governmental Accounting Standards Board Statement No. 40 Deposit and Investment
Risk Disclosure, directs that deposits be disclosed as exposed to custodial credit risk if
they are not covered by depository insurance or collateralized by securities held by the
District or its agent in the District's name. Deposits and investments at December 31,
2009 were entirely covered by federal depository insurance or collateral held by the
District's custodial bank in the District's name and is not subject to custodial credit risk.
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C. Pension Plan -Volunteer Firefie:hter Service Award Prog:ram
1. Plan Description
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The District contributes to the Hughsonville Fire District Volunteer Firefighter Service
Award Program, a plan of deferred compensation (i.e. a non-qualified plan under the
Internal Revenue Code). The District Board of Fire Commissioners of the Hughsonville
Fire District is the Trustee and Plan Administrator for the Service Award Program. The
District Board of Fire Commissioners retains an independent third party pension plan
administration firm to assist them in administering the Service Award Program. In
addition, plan investments are made through an independent broker who advises the
District Board of Fire Commissioners with regard to the investment ofthe Program assets.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31.2010
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NOTE A - Summary of Accountine: Policies (Continued)
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All persons who are active volunteer firefighters of the District in accordance with the by-
laws of the Hughsonville Fire Company are eligible to become participants in the Service
Award Program. An individual firefighter's earned Service Award equals $20 per month
for each year of service credit earned to a maximum of 20 years with lifetime monthly
Service Award payments commencing upon attainment of age 62. A firefighter earns a
year of service credit for a calendar year if he or she earns a minimum number of points
for participation in volunteer firefighter activities under a point system and meet any other
active volunteer firefighter requirements imposed by the District/Fire Company. A
volunteer firefighter's earned Service Award vests after the firefighter earns five years of
Service A ward Program service credit. Death and disability benefits are also provided to
volunteer firefighters under the Service Award Program. The Service Award Program
was established in accordance with Article ll-A of the New York State General
Municipal Law.
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2. Plan Investments
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The Program assets can be invested in Money Market Funds, Mutual Funds, U.S.
Government Securities, and Certificates of Deposit and are recorded at fair market value.
They are not subject to the collateral requirements described in Note B.
3. Funding Status of the Program
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The amount shown below as the pension benefit obligation is a standardized disclosure
measure of the present value of earned Service Awards (i.e. for this purpose, a
firefighter's earned Service Award is considered to be a pension benefit), estimated to be
payable in the future as a result of volunteer firefighter service rendered to date. The
difference between the pension benefit obligation and the accumulated plan assets is the
unfunded portion of the pension benefit obligation (i.e. the unfunded pension benefit
obligation). This measure is intended to assess the funding status of the District's Service
A ward Program on a going concern basis and assess progress made in accumulating
sufficient assets to pay earned Service Awards when due. The calculation of the pension
benefit obligation is independent of the actuarial funding method used to determine annual
contributions payable to the Service Award Program Trust Fund.
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The pension benefit obligation was computed as part of an actuarial valuation performed
as of December 31, 2010. Significant actuarial assumptions used in the valuation include:
i.
a. the rate of return on the investment of present and future assets of 5.5% a year,
compounded annually; and,
b. the actuarial value of earned Service Awards calculated on the assumption that each
participating firefighter continues to be an active volunteer firefighter, lives to age 62 and
his or her post age 62 mortality is in accordance with the 1994 Unisex Pensioners
Mortality Table for males projected to 2007 with Scale AA.
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20
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L HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
~ NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
L DECEMBER 31. 2010
L NOTE A - Summary of Accountine: Policies (Continued)
The actuarial valuation performed as of December 31, 2010 used the following:
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Actuarial Cost Method
Amortization Method
Remaining Amortization
Period - prior service cost
Asset valuation method
Attained Age
Level Dollar
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5 years
Fair value
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The total unfunded pension benefit obligation applicable to the District's volunteer
firefighter participants in the Service Award Program was $318,674 as of December 31,
2010, is as follows:
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Pension Benefit Obligation:
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Retirees Receiving Benefits:
$ 240,785
483,638
98,023
822,446
(503,772)
$318,674
Current Volunteer Firefighters
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V ested Terminations
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Total Pension Benefit Obligation
Net Assets Available for Benefits, at Market Value
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Unfunded Pension Benefit Obligation
The District has a net pension obligation equivalent to the unfunded required
contributions, described as follows:
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Actuarial Valuation Date 12/31/08 12/31/09 12/31/1 0
Actuarial Value of Plan Assets $381,542 $455,203 $503,772
Liability $29.823 $29.064 $26.088
Actuarial Accrued Liability
12/31/08 12/31/09 12/31/10
Beginning Balance $34,214 $29,823 $29,064
Accrued Interest 1,555 1,379 0
Contribution Due 28,268 25,065 26,088
Decrease (Payment Described Below) (34,214) (27,203) (29,064)
Ending Balance $29.823 $29.064 $26.088
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31,2010
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NOTE A - Summary of Accountine: Policies (Continued)
The change in net assets is as follows:
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Contributions Accrued
Net Investment Income
Benefits Paid
$42,474
30,095
(24,000)
48,569
455.203
$503,772
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Net Increase
Net Assets January 1,2010
Net Assets December 31, 2010
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4. Actuarially Determined Contribution Requirements and Contributions Made
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The District contribution to the Service Award Program Trust Fund for the calendar year
ended December 31, 2010 of $26,088 was calculated in accordance with actuarially
determined requirements computed through the actuarial valuation performed as of
December 31,2010 and is due in 2011. The liability is included in the Statement of Net
Assets. The contribution consisted of:
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a. $24,728 normal cost and timing adjustment of$1,360;
b. There is no past E.A. service cost.
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The computation of the service award program contribution requirements for the current
fiscal year was based on the same actuarial assumptions, benefit provisions, actuarial
funding method, and other factors used to determine the program contribution
requirements in prior years.
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5. Trend Information
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Three year funding trend information is as follows. The net pension obligation is
equivalent to the unfunded actuarial liability representing unpaid contributions.
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Annual Pension Cost
Percentage Contributed
12/31/08
$28.268
100%
12/31/09
$25.065
100%
12/31/1 0
$26.088
100%
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Net Pension Obligation
$29.823
$29.064
$26.088
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONTI D.)
DECEMBER 31. 2010
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NOTE A - Summary of Accountin2 Policies (Continued)
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D. Property Taxes
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The District submits an approved budget to the Town ofWapJ;>inger for submission to the
Dutchess County Commissioner of Finance by December 5 of the previous year. The
County then establishes the warrant for the year which is due and payable on or about
January 1 of each year. The Town collects the taxes and forwards the District's levy in
full.
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E. Lon2- Term Obli2ations
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Long- Term Debt is recognized as a liability of a governmental fund when due, or when
resources have been accumulated in the debt service fund for payment early in the
following year. For other Long-Term Obligations, only that portion expected to be
financed from expendable available financial resources is reported as a fund liability of a
governmental fund. The full amount of such obligations is reported in the Statement of
Net Assets.
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F. Insurance
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The Hughsonville Fire District assumes the liability for most risk including, but not
limited to, property damage and personal injury liability. Such risks are covered by the
purchase of commercial insurance. Judgments and claims are recorded when it is
probable that an asset has been impaired or a liability has been incurred and the amount of
loss can be reasonably estimated. Workers compensation coverage is provided through a
retrospective policy, wherein premiums are recorded based on the ultimate cost of the
experience to date of workers in similar occupations.
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G. Capital Assets
Capital assets purchased or acquired are reported at historical cost or estimated historical
cost. Contributed assets are reported at fair market value as of the date received.
Additions, improvements and other capital outlays that significantly extend the useful life
of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed
as incurred. Depreciation is provided on the straight-line basis over the estimated useful
lives of 5-20 years.
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H. Interfund Activitv
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Interfund activity is reported as either loans, services provided, reimbursements or
transfers. Loans are reported as interfund receivables and payables as appropriate and are
subject to elimination upon consolidation. The District generally records interfund
transactions as transfers. Balances and transfers between governmental or proprietary
funds are netted as part of the reconciliation to the government-wide financial statements.
The District reflected the use of Capital Reserve funds in the amount of $90,000 by the
General Fund at year-end.
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31.2010
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II.
NOTE A - Summary of Accountint!: Policies (Continued)
I. Use of Estimates
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The preparation of basic financial statements, in conformity with accounting principles
generally accepted in the United States of America, requires management to make
estimates and assumptions that affect the amounts reported in the basic financial
statements and the accompanying notes. Actual results could differ from those estimates.
L
J. Risk Manae:ement
L
The District assumes the liability for most risk including, but not limited to, property
damage and personal injury liability. Such risks are covered by the purchase of
commercial insurance. Judgments and claims are recorded when it is probable that an
asset has been impaired or a liability has been incurred and the amount of loss can be
reasonably estimated. Workers compensation coverage is provided through a retrospective
policy, wherein premiums are recorded based on the ultimate cost of the experience to
date of workers in similar occupations.
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NOTE B - Capital Assets
The following is a summary of the changes in Capital assets for the year:
l Gowrnmental Activities:
Vehicles
if Equiptrent
..
Buildings
L Construction in progress
Total
.. Less Accumulated Depreciation
Vehicles
BALANCE BALANCE
JANUARY 1, DECFMBFR 31,
2010 ADDmONS (DISPOSAlS) 2010
$ 2,218,075 $ 90,000 $ - $ 2,308,075
250,787 99,160 349,947
311,418 311,418
133,049 13 L 794 (264.843)
$ 2,601,911 $ 632,372 $ (264,843) $ 2,969,440
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$ 798,597 $ 159,120
112,012 56,902
7,785
910,609 223,807
$ 1,691,302 $ 408,565
$
- $
957,717
168,914
7,785
1,134,416
1,835,024
,}
II. Equiptrent
Buildings
Total Accumulated Depreciation
Gowrnmental Activities Captal Assets, Net
$
(264,843) $
..
*Depreciation was charged to govemtrentalactivities as follows:
..
Public Safety $ 223.807
24
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONTI D.)
DECEMBER 31.2010
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NOTE C - Lone-Term Debt
The District borrows money in order to acquire equipment or construct buildings and public
improvements. This enables the cost of these capital assets to be borne by the present and future
taxpayers receiving the benefit of the capital assets. The provision to be made in future budgets for
capital indebtedness represents the amount, exclusive of interest, authorized to be collected in future
years from taxpayers and others for liquidation of long-term liabilities.
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II.
1. Serial Bonds Payable
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The District may borrow an amount for any object or purpose for which has a period of
probable usefulness has been established.
The Serial Bonds Payable, as of December 31, 2010, are as follows:
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ORIGINAL
ISSUE
DATE
06/10/03
FINAL
MA 1lJRITY
DATE
06/09/13
ORIGINAL
AMOUNT
OF ISSUE
$ 400,000
$ 400,000
INTElilll T
RATE
4.30%
I.
PURPOSE
Vehicles
TOTAL
AMOUNT
OUTSTANDING
AT
DECEMBER 31,
"
2010
$ 160,000
$ 160,000
2. Chanees in Lone Term Debt
The changes in the District's indebtedness during the year ended December 31, 2010 are
summarized as follows:
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BALANCE
JANUARY I,
2010
ADDmONS (REDUCTIONS)
$ - $ (40,000) $
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$
160,000
Serial Bonds
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Notes Payable
Obligations Under Capital Lease
62,050
520,851
(33,257)
(73,257) $
i..
TOTAL $ 680,851 $
3. Amortization of Bonded Debt
62,050 $
AMOUNTS
DUE WITHIN
ONEYFAR
40,000
11,277
33,257
BALANCE
DECEMBFR31,
"
2010
120,000 $
62,050
487,594
669,644 $
84,534
The annual requirements to amortize bonded debt, as of December 31, 2010, are as follows:
...
YFAR ENDING
... DECEMB:ER 31, PRINCIPAL INTEREST TOTAL
2011 40,000 5,160 45,160
2012 40,000 3,440 43,440
ill 2013 40,000 1,720 41,720
TOTALS $ 120,000 $ 10,320 $ 130,320
Ii. 25
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HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
NOTES TO THE FINANCIAL STATEMENTS (CONT'D.)
DECEMBER 31. 2010
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NOTE D - Capital Leases
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In 2006, the District entered into two capital leases for fire equipment and a fire vehicle, with a
total asset cost of $642,934. These leases are considered to be capital leases for accounting
purposes, wherein, at the end of the lease the District retains ownership of the asset. At
December 31, 2010, the annual capital lease payments are as follows:
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YFARINDING
DECFMBIm.31.
2011
2012
2013
2014
2015
CAPITAL
LFASIS
57,841
57,841
57,841
57,841
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TOTAlB
404,887
(173,241 )
463,010
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Thereafter
Less: Interest Portion
$
$:-
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NOTE E - New Reporting Standard
...
In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement 54
Fund Balance Reporting and Governmental Fund Type Definitions. This Statement establishes
certain new financial reporting requirements for state and local governments throughout the
United States. When implemented, it will require the reporting of fund balance in five
categories: non-spendable, restricted, committed, assigned, and unassigned. The District is
required to implement this standard for the year ending December 31, 2011. The
implementation of GASB Statement 54 will not have a substantive effect on the District's
government wide or governmental (fund) financial position.
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REQUIRED SUPPLEMENT AL INFORMATION
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EXHIBIT I
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF REVENUES, EXPENDITURES AND ENCUMBRANCES
BUDGET AND ACTUAL - GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31. 2010
ORIGINAL! VARIANCE
AMENDED FAVORABLE
BUDGET ACTUAL (UNFAVORABLE)
REVENUES
Real Property Taxes $ 740,936 $ 740,936 $
Use of Money and Property 1,300 832 (468)
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Total Revenues 742,236 741,767 (469)
Appropriation of Prior's Year's Fund Balance
Total Revenues and Appropriation of
Prior Year's Fund Balance 742,236 741,767 (469)
EXPENDITURES AND ENCUMBRANCES
Public Safety 458,884 628,894 (170,010)
Employee Benefits 88,631 79,363 9,268
Debt Service 104,721 104,996 (275)
Total Expenditures and Encumbrances 652,236 813,252 (161,016)
Excess (Deficiency) of Revenues and Appropriation of
Prior Year's Fund Balance Over (Under)
Expenditures and Encumbrances 90,000 (71,485) (161,485)
Other Financing Sources (Uses):
Operating Transfers in 90,000 90,000
Operating Transfers out (90,000) 90,000
Total Other Financing Sources (Uses) (90,000) 90,000 180,000
Excess (Deficiency) of Revenues and Appropriation of
Prior Year's Fund Balance and Other Sources
Over (Under) Expenditures, Encumbrances
and Other Uses $ $ 18,515 $ 18,515
See independent auditor's report
27
..
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED DECEMBER 31.2010
HUGHSONVILLE FIRE DISTRICT
HUGHSONVlLLE, NEW YORK
TABLE OF CONTENTS
FOR THE YEAR ENDED DECEMBER 31. 2010
DESCRIPTION
P AGE(S)
Independent Auditors' Report ...................................................................................................... 1-2
Schedule of Findings and Recommendations .......................................... .................... ................ 3-4
Responses to Schedule of Findings and Recommendations ............................................................5
HUDSON VALLEY CPAs
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James L. Sedure, Jr, CPA
Mark S. O'Sul/itJan, CPA
James F Lelterio, Jr, CPA
Linda M Hannigan, CPA
Karen T Hansen, CPA
Jeffrey L. Brown, CPA
Charles R. Rae, Jr, CPA
~~ SEDORE
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, New York for the year ended December 31,2010, in accordance
with auditing standards generally accepted in the United States of America, we
considered the District's internal control over financial reporting (internal control) as a
basis for designing our auditing procedures for the purpose of expressing our opinions on
the financial statements, but not for expressing an opinion on the effectiveness of the
Hughsonville Fire District's internal control. Accordingly, we do not express an opinion
on the effectiveness of the Hughsonville Fire District's internal control.
A deficiency in internal control exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct misstatements on a timely basis. A material
weakness is a deficiency, or combination of deficiencies in internal control, such that
there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control was for the limited purpose described in the first
paragraph and was not designed to identify all deficiencies in internal control that might
be deficiencies, significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control that we consider to be material weaknesses.
However, as discussed below, we identified certain deficiencies in internal control that
we consider to be significant deficiencies. A significant deficiency is a deficiency, or
combination of deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit attention by those charged with governance. The
significant deficiencies are summarized in Section 1.
During our audit we became aware of matters that are opportunities for strengthening
internal controls and operating efficiency. Section II summarizes our findings and
recommendations regarding those matters.
Poughkeepsie Office
2678 South Road I Suite 101 I Poughkeepsie, New York 12601
Tel: (845) 485-5510 Fax: (845) 485-5547 I Email: inlo@sedoreco.com I Web: www.sedoreco.com
POUGHKEEPSIE. PORT JERVIS · FISHKILL
1
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.
~ /~h--/l~(!/l/l5
Poughkeepsie, New York
August 30, 2011
2
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED DECEMBER 31.2010
SECTION I - SIGNIFICANT DEFICIENCY:
Findin2 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.
Findin2 2 - Financial Statement Adiustments:
Under auditing standards in accordance with generally accepted accounting principles,
District personnel are responsible for preparation and review of financial information as
part of the District audit. During our audit, we recorded significant reclassifications of
expenses from "encumbrances" to the appropriate budget line.
3
HUGHSONVILLE FIRE DISTRICT
HUGHSONVILLE, NEW YORK
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D.)
FOR THE YEAR ENDED DECEMBER 31. 2009
Effect:
Budget comparison reports are inaccurate.
Cause:
Expenditures were charged to an incorrect budget line.
Recommendation:
We recommend that the District review its financial statements to ensure that
expenditures are posted to the appropriate budget line. Year-end encumbrances are only a
reduction of fund balance. In the following year, payment of vouchers previously
encumbered are considered expenditures of that year, where the funding source is
appropriated fund balance, rather than that year's property taxes.
Findine: 3 - Cash Disbursements
During our test of cash disbursements, we noted that some of our selections required
verbal or written quotes, however documentation was not always available.
Cause:
Quote documentation was not always retained. In our sample of 25 transactions, five
purchases required obtaining quotes, however documentation supporting the quotes was
not available.
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.
Prior Year Findine:s:
Finding 4 has been satisfied.
4
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'Fa.r; (845) 297-4560
Board of Fire Commissioners
Ronald P. Andrews - Chairman
Joseph DiPressi - Deputy Chairman
Mark Liebermann - William Spinelli
Jason Morse, Sr.
'Meets 5.:coruffihhustfoy
oj'Eacli :Month
Glenn M. Kramer- Chief of Department
Bruce M. Flower - 1st Assistant Chief
Timothy N. Laffin - 2nd Assistant Chief
September 15, 2011
Re: District response to Year Ended December 31, 2010 Audit
Findin2 1- Fixed Assets:
The District has not taken a recent physical inventory which is then related to its accounting records.
District Response:
The firematic officers do an annual inventory of all the equipment on the fire apparatus and have that
inventory in their records. The Fire District is looking into the possibility of having an independent
agency come in and maintain a full inventory of all the equipment. There is an inventory of all recent
capital items that have been purchased.
Findin2 2 - Financial Statement Adiustments:
Under auditing standards in accordance with generally accepted accounting principles, District personnel
are responsible for preparation and review of financial information as part of the District audit. During
our audit, we recorded significant reclassifications of expenses from "encumbrances" to the appropriate
budget line.
District Response:
The treasurer will follow up with the auditors to clarify the reclassifications to understand what went
wrong and to prevent this in the future.
Findin23 - Cash Disbursements:
During our test of cash disbursements, we noted that some of our selections required verbal or written
quotes, however documentation was not always available.
District Response
The District had noted this deficiency internally and is working to educate all the people involved with
getting quotes. There is a form that is to be used when quotes are required.
Respectfu 11 y,
Michael Schappert
Treasurer
Hughsonville Fire District
5