An audit by the state of the Parishville Fire District’s books finds a lack of written reports and failure to remit withheld taxes on pay to tax authorities.

The audit, by the state Comptroller’s Office, also said that the fire district board has not adopted purchasing and investment policies or a code of ethics.

“At the monthly board meetings, the secretary-treasurer provides the board with a verbal report of the district's bank balances; however, he does not provide periodic written financial reports showing cash balances or budget vs. actual results,” the report said.

The secretary-treasurer has not filed an annual financial report since 2002, according to the audit, and “The secretary-treasurer has also been withholding Social Security and Medicare taxes from his salary since he took office in 2003 but has not reported or remitted these taxes (including the District's share) to the Internal Revenue Service. Based on his annual salary from 2003 to 2010 ($3,750 to $4,000), auditors estimate the district withheld about $2,350 for these taxes from his pay.”

After going over records, the auditor selected 20 disbursements totaling $41,500 for further review of the supporting claim for payment.

“Generally, we found that financial activity was properly recorded in the Secretary-Treasurer’s checkbook register and supported, and that disbursements appeared to be for proper District purposes. However, the District could not provide supporting documentation for nine disbursements totaling $4,796. This includes $2,000 paid to the Parishville Fire Department (Department) for an annual awards banquet for the firemen and rescue squad and $1,800 paid to the Department for the Fire Chief’s duties and expenses (i.e., mileage, meals). The District paid these claims without obtaining documentation, such as receipts or invoices, necessary to support these expenditures and allow the Board to determine whether the expenditures were proper,” the report said.

The auditor made several recommendations:

1. The Board should adopt purchasing and investment policies as well as a code of ethics.

2. The Board should require the Secretary-Treasurer to prepare and present written monthly reports to assist in monitoring financial activity.

3. The Board should review monthly bank reconciliations prepared by the Secretary-Treasurer.

4. The Secretary-Treasurer should maintain subsidiary revenue and expenditure ledgers to help facilitate the preparation of monthly and annual financial reports.

5. The Board should ensure that the Secretary-Treasurer files the District’s annual financial reports with the Office of the State Comptroller in a timely manner.

6. The Board should audit the Secretary-Treasurer’s records annually as required by Town Law.

7. The Board should ensure that the Secretary-Treasurer prepares the appropriate returns and remits the payroll taxes to the IRS.

8. The Board should ensure that all vendors that are subject to the issuance of a 1099 form are properly identified and reported to the IRS as required.

9. The Board should ensure that all disbursements have adequate supporting documentation and are for legitimate District purposes.

The district board has reviewed the report and they have accepted the auditor’s findings. They say they have already taken steps to comply with the recommendations and will develop a written plan for corrective action.