Two Ballston Spa fire companies were cited Thursday by the state Comptroller’s Office for lack of financial oversight after separate audits.
Neither audit uncovered criminal wrongdoing, but the audits did uncover weak financial controls of the kind that could put department funds at risk. Union Fire Company No. 2 and the Eagle-Matt Lee Fire Company No. 1, both located in Ballston Spa, were audited.
The audits, among a number released by the Comptroller’s Office statewide Thursday, found that each department failed to prepare operating budgets for the fiscal years 2011-2012 and 2012-2013. The boards of each company also did not provide adequate oversight of company financial activities, including not adopting written financial policies and procedures.
“A lack of controls increases the risk for abuse,” the Union audit reads. “Because the Board has not established adequate policies and procedures for controlling cash receipts and disbursements, it has not fulfilled its fiduciary responsibility to account for and safeguard Company moneys.”
The Eagle-Matt Lee audit includes a similar passage.
Representatives of the companies could not be reached Thursday. However, each audit included brief letters from department officials.
Union foreman Glenn Bowers Jr. wrote that his board accepted the recommendations, with each item to be discussed in the department’s corrective action plan to be filed.
Eagle-Matt Lee president Gerald Morris indicated that his board was in “total agreement” and that a financial operations plan and changes to company bylaws were in the works.
Regarding the Union Fire Company, its constitution and bylaws had not been updated since 1978, its audit found. It also did not include compensation paid to four officers, including the treasurer. The compensation paid to the officers in 2011-2012 was between $250 and $500.
The accounting system was inadequate because check registers were not maintained. Adequate internal controls were not in place to ensure funds from fundraisers were properly accounted for.
The audit recommended the board approve bills prior to payment, something not directly addressed in the bylaws. Among the instances cited was a $5,000 transfer to another company without authorization or supporting documentation, and two $1,000 payouts to families of deceased company members. Bylaws — the same ones that haven’t been updated since 1978 — only called for $150 payouts. Documentation issues were also cited.
In the Eagle-Matt Lee audit, the auditors found that its board had not adopted written financial policies and procedures or a code of ethics, as required. The audit also found that check registers were not maintained to track deposits, withdrawals or balances. There was no record of activity by the audit committee auditing and approving bill payments, or performing an annual review. Internal controls over fundraisers were also needed.
Among the instances cited in the Eagle-Matt Lee audit were checks that either lacked supporting documentation, had no evidence of review by the audit committee or didn’t agree with what was recorded.