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Fire department audit uncovers spending

PENN YAN—A review of the most recent audit of the Penn Yan Fire Department produced a number of findings about department expenditures over the three years covered.
One of the first findings noted stipends received by the chief and three assistant chiefs, which ranged from $2,525 to $3,125 a year, were not being reported to the Internal Revenue Service.
Over the three year period, among the four departments, more than $60,000 was spent for beer, soda, restocking the liquor cabinet and food for lunches, dinners and parties. The lack of documentation for expenses as well as follow up documentation for deposits was noted as was the fact that several checks that had been written never cleared the bank.
Auditors were unable to determine whether the checks were voided, destroyed or lost. Deposit slips were not provided to the auditors and therefore they were unable to verify the source of deposits and unable to determine the profitability of different events and fundraisers or whether all the cash collected for the fundraisers and events was deposited into the respective bank accounts. Another section referred to the State Comptroller’s general rule regarding how expenses can be considered “Actual and necessary.”  However in reviewing several accounts it was noted there were several expenses that may not have met that definition.
The audit of how $42,500 from the annual contract between the village of Penn Yan and the Penn Yan Volunteer Fire Department was spent was performed by Certified Public Accountants Eldredge, Fox and Porretti, based in Rochester. The document covered three years ending on December 31, 2007. The document noted the auditors were unclear as to whether the fire department falls under municipal or nonprofit laws and regulations due to the fact they indirectly receive taxpayer money. Eldridge, Fox and Porretti was hampered by the fact they were not provided with deposit slips, making it impossible to verify the source of deposits.
One of the four companies, Ellsworth Hose, did not provide any vendor invoices or receipts supporting purchases made during the audit period. There are several bank accounts for different purposes and each fire company has its own checking account. Several recommendations were made at the time of the audit including consideration of using a computerized general ledger system and developing a standard chart of accounts. Another recommendation was that an annual budget be prepared for the department and each company.
In addition, it was noted village trustees should consider incorporating some stipulations in the next annual contract including, among others, the right to approve all fund-raising activities as outlined in General Municipal Law, requiring annual accounting from the department and individual companies. The document also recommended a list of reporting procedures.
Penn Yan Fire Department is made up of four companies; Hunter Hook and Ladder, Hydrant Hose, Ellsworth Hose and Sheldon Hose. Currently there are a total of 67 members in the four companies. Each of the four companies has a chief and one is the department chief. More questions about the finances of the Penn Yan Fire Department may be answered at the July 20 meeting of the Penn Yan Village Board.
The issue of how money from the $42,000 annual contract the village has with the fire department resulted in Mayor Bob Church naming an ad hoc committee to study the matter shortly after he was elected mayor earlier this year. Fire Chief Rick Retorick declined to comment about the matter. He said he would rather not say anything until the ad hoc committee had completed its work.
Ad hoc committee chairman, Village Trustee Michael Christensen said, “We’re moving along. There is a lot of material out there on the different aspects on how departments are run.” A meeting between the committee and the four fire chiefs is expected to be scheduled soon. Church said, “We hope to have some recommendations ready for the July village board meeting.” 
 





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