State comptroller's audit of Eagle-Matt Lee Fire Co. cites weak fiscal oversightPublished Jan. 27, 2013

BALLSTON SPA -- A state comptroller's audit found no wrongdoing, but cites weaknesses with a local fire company's fiscal oversight.

Eagle-Matt Lee Fire Company's board failed to properly guide those responsible for receiving and depositing cash, creating a risk that money might not be used appropriately or deposited and accurately recorded, the report says.

Findings in state Comptroller Thomas DiNapoli's audit are from the period Jan. 1, 2010, to June 13, 2012.

"Controls over the company's fiscal activities were weak," the report says. "The board has not adopted written financial policies and procedures or a code of ethics, as required by statute. Additionally, operating budgets were not prepared for the 2011-12 and 2012-13 fiscal years."


In a Dec. 28 written response to DiNapoli's office, fire company President Gerald Morris said the board of directors agrees with audit findings and will address each of 10 different recommendations.

"We are working on a written financial operations plan, as well as necessary changes to our company bylaws," Morris wrote.

For the year ending March 31, 2012, the fire company had about $45,000 in revenue and spent about $49,000. The volunteer department covers the village and parts of of Ballston and Milton.

The audit said the company's accounting system was inadequate because check registers were not kept to track bank deposits, withdrawals or cash balances. Also, income and expense ledgers weren't maintained, bank reconciliations were not done, and bank statements were only reviewed by the treasurer.

The treasurer could make savings account withdrawals without written authorization or subsequent review, the report says. The treasurer did prepare an annual fiscal report for 2011-12, but auditors found it to be insufficient.

"As a result of the lack of oversight, errors and inconsistencies could occur and go undetected and uncorrected," the report says. "A lack of control invites abuse."

The state says the company should establish procedures to ensure that all money received during fundraising activities are properly accounted for and recorded.

In a review of 59 checks, auditors classified them as "high risk" because they were made out to "cash" or individuals including company officials or were used to buy goods and services from local stores.

Company officials told auditors that some money was used to create change for customers at fundraising events such as pancake breakfasts or car washes. Other funds were used to pay a kitchen crew and buy refreshments for a drill meeting.

"Without proper documentation, these assertions could not be verified," the audit says.

To view the audit online, go to www.osc.