WESTFIELD - Many changes regarding the financial accounting and management of the Village of Westfield Volunteer Fire Department will be implemented during August in response to a very critical audit released recently by New York State Comptroller Thomas P. DiNapoli's office.
"The financial operations of the department were very poorly run and documented," was the auditor's conclusion. Department officials did not disagree with any of the findings in their response letter to the comptroller and pledged to start making the recommended changes immediately.
The auditor was also critical of the financial connections between the fire department and the Westfield Firemen's Exempt Association echoing criticism made by Village of Westfield Mayor David Carr and Chairman of the Fire Board of Commissioners Barry Underwood.
"Additionally we found there is an informal relationship between the department and an external not-for-profit organization, which resulted in a portion of the department's meeting minutes being altered or not made available for our review," the audit says.
The auditors also criticized the Exempts for fundraising under the department's name. In response the fire department agreed all fundraising efforts going forward will make clear the sponsoring organization.
There are 13 recommendations contained in the audit and the fire department officials agreed with all of them and outlined proposed remedies.
"The withholding of information raises concerns that inappropriate activity maybe occurring."
Audit released by the office of the New York State Comptroller Thomas P. DiNapoli
Most of the deficiencies, according to the audit, resulted from lack of documents and lack of accountability. The department, its three companies and emergency squad were not subjected to an annual internal audit from Jan. 1, 2010 through Feb. 9, 2012, the period reviewed by the state comptroller's office.
"The department allows three individuals to manage departmental bank accounts," the audit says. As a result, the fire department treasurer supervised accounts for "foreign fire insurance," "the memorial fund" and "emergency first-aid squad funds," but did not manage the "bell jar" and "games of chance accounts" which were overseen by someone else, while a third person supervised "the bingo bank account."
In mid-2011, according to an audit footnote, responsibility for the first aid squad account was transferred to that squad's treasurer and the memorial account was placed under the village treasurer.
Records "destroyed, missing or otherwise unavailable to support certain disbursements" prevented proper oversight, according to the audit. "We also found that payments were not authorized prior to disbursement, debit cards were used by department members and receipts were not issued as required by the department's by-laws," the audit says.
Lack of internal controls comprise the topic of much of the audit report.
"There was no indication that an audit of any of the department's financial records occurred or that an audit committee was established by the department to annually review the treasurer's records," the audit says. "The lack of oversight and review of disbursements made by various individuals, as well as the lack of adequate documentation and use of debit cards places department funds at great risk for being used for purposes other than intended. ... In addition due to lack of duplicate receipts, department officials cannot ensure that all collections are deposited."
Another problem surfaced when the auditors found most financial information was not being included in the minutes of department meetings.
"When we asked about the lack of financial reporting in the minutes, the department secretary stated that she removed information prior to giving us the minutes for our review," the audit says. "She stated this was done because the financial reports were included during the 'Exempt' portion of the meeting. ... Upon further inquiry we were provided minutes that included additional financial information, namely bingo reports. However based on the differences between the two sets of minutes we were given, and the lack of original complete department minutes we cannot be certain that the information provided to us is accurate and complete with respect to the affairs of the department that were addressed at the meetings.
"The withholding of information raises concerns that inappropriate activity maybe occurring," the audit says.
The audit did note that documentation for bingo "was generally available" and for other accounts photocopies of checks rather than the cancelled checks themselves were kept, a practice the comptroller wants corrected.
While the report is critical, the auditors make no allegation of wrongdoing in the fire department or the Exempts. A copy of the full audit can be found at www.osc.state.ny.us/localgov/audits/firedists/2012/westfield.pdf.