U-Crest Fire District #4 · 2016. We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). ... , please refer to our brochure, Responding

Division of LocaL Government & schooL accountabiLity

o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r

report of ExaminationPeriod Covered:

January 1, 2015 — December 5, 2016

2017M-35

U-Crest Fire District #4Travel Expenditures

thomas p. Dinapoli

Page

AUTHORITY LETTER 1

INTRODUCTION 2 Background 2 Objective 2 Scope and Methodology 2 CommentsofDistrictOfficialsandCorrectiveAction 2

TRAVEL EXPENDITURES 4 Travel Policy 4 Meals and Lodging 5 Rental Cars 6 Recommendations 7

APPENDIX A ResponseFromDistrictOfficials 8APPENDIX B AuditMethodologyandStandards 11APPENDIX C HowtoObtainAdditionalCopiesoftheReport 12APPENDIX D LocalRegionalOfficeListing 13

Table of Contents

11Division of LocaL Government anD schooL accountabiLity

State of New YorkOffice of the State Comptroller

Division of Local Governmentand School Accountability April2017

DearFireDistrictOfficials:

A toppriorityof theOfficeof theStateComptroller is tohelp localgovernmentofficialsmanagegovernment resources efficiently and effectively and, by so doing, provide accountability for taxdollarsspenttosupportgovernmentoperations.TheComptrolleroverseesthefiscalaffairsoflocalgovernmentsstatewide,aswellascompliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversightisaccomplished,inpart,throughouraudits,whichidentifyopportunitiesfor improving operations and Board of Fire Commissioners governance.Audits also can identifystrategies to reduce costs and to strengthen controls intended to safeguard local government assets.

FollowingisareportofourauditoftheU-CrestFireDistrict#4,entitledTravelExpenditures.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.

This audit’s results and recommendations are resources for local government officials to use ineffectivelymanagingoperationsand inmeeting theexpectationsof their constituents. Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedat the end of this report.

Respectfullysubmitted,

Office of the State ComptrollerDivision of Local Governmentand School Accountability

State of New YorkOffice of the State Comptroller

2 Office Of the New YOrk State cOmptrOller2

Background

Introduction

Objective

Scope and Methodology

Comments of District Officials and Corrective Action

The U-Crest Fire District #4 (District) is a district corporation of the State,distinctandseparatefromtheTownofCheektowagainErieCounty. The District’s 2017 general fund budgeted appropriationstotal approximately $1.2million and are funded primarily by realpropertytaxes.

An elected five-member Board of Fire Commissioners (Board) isresponsible for theDistrict’soverallfinancialmanagement and forsafeguarding its resources. The Board appoints a Treasurer and a Secretary.TheTreasureractsastheDistrict’schieffiscalofficerandisresponsibleforthereceiptandcustodyofDistrictfunds,disbursingand accounting for those funds, preparing monthly and annualfinancialreportsandmeetinganyotherreportingrequirements.TheSecretary is responsible for keeping a complete and accurate record of the proceedings of each Board meeting and all Board-adopted rules and regulations.

During 2015 and 2016,1 the District’s travel and conferenceexpenditurestotaledapproximately$113,000andincludedpaymentsmadetovendorsandreimbursementstoDistrictofficials.

The objective of our audit was to examine the District’s travelexpenditures.Ourauditaddressedthefollowingrelatedquestion:

• DidtheBoardensurethattravelandconferenceexpenditureswere necessary and reasonable?

We reviewed all payments relating to travel and conference expenditures for the period January 1, 2015 throughDecember 5,2016.

We conducted our audit in accordance with generally accepted governmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixBofthisreport.

The results of our audit and recommendations have been discussed withDistrictofficials,andtheircomments,whichappearinAppendixA, have been considered in preparing this report.District officialsgenerally agreed with our recommendations and indicated they have taken corrective action.

1 ThroughNovember2016


The Board has the responsibility to initiate corrective action. Pursuant toSection181-bofNewYorkStateTownLaw,awrittencorrectiveactionplan(CAP)thataddressesthefindingsandrecommendationsinthisreportmustbepreparedandforwardedtoourofficewithin90days.Totheextentpracticable,implementationoftheCAPmustbeginbytheendofthenextfiscalyear.FormoreinformationonpreparingandfilingyourCAP,pleaserefertoourbrochure,Responding to an OSC Audit Report,whichyou receivedwith thedraft audit report.TheBoardshouldmaketheCAPavailableforpublicreviewintheSecretary’soffice.


Travel Expenditures

A fire district may pay for actual and necessary travel-relatedexpenditures incurred by authorized fire district officials whileattending conferences or conventions on official business. Acomprehensive written travel policy is essential for ensuring travel costs are properly controlled. Additionally, General MunicipalLaw(GML)states thatperdiemratesformealscannotexceedthestandard daily rates allowed for federal income tax purposes.TheGeneral Services Administration (GSA) is a federal agency thatestablishes per diem2ratesformealandlodgingexpendituresrelatingto government travel. These rates are used by the federal government andothergovernmententities,includingNewYorkState.

Ourreviewof$113,000intotaltravelexpendituresincurredduring2015and20163identifiedsignificantpotentialsavingsthattheDistrictcouldhaveachievedinreimbursingofficialsformeals,lodgingandvehiclerentals.AlthoughtheBoardhasnotadoptedawrittentravelpolicy, itadoptedaresolutionestablishingaperdiemrateof$100to cover meals and incidental travel expenditures. However, thisrate exceeded the GSA per diem rates for meals and incidentals.Of $31,100 that the District paid to 14 officials for meals andincidentalsduring2015and2016,itcouldhavesavedupto$17,600,or57percent,byusing theestablishedGSArates. Inaddition, theBoard has not established clear limits or parameters for determining reasonable lodging costs or cost-effective methods of travel. Of $39,700 in lodging transactions for 10overnight trips, theDistrictpotentiallycouldhavesavedupto$12,800(32percent)ifdiscountedconference hotel rates were used when available. The District also paid$2,600invehiclerentalcostsforofficialsattendingthreeout-of-stateconferencesin2015and2016butcouldhavesavedupto$1,600(62percent)hadDistrictofficialssharedrentalcars.

Fire district commissioners and officers can attend conferencesat fire district expense, but conference travel must be for officialbusiness,usinga“cost-effectiveand reasonablemethodof travel.”Accordingly, the Board should adopt and enforce written policiesdefiningcost-effectiveandreasonablemethodsoftravelthatprovideclearandspecificguidelinesforallowabletravelandreimbursementand include expenditures typically reimbursable, such as lodging,mileage allowances, taxi and rental car expenditures and mealexpenditures. The policy should also include the reimbursement

Travel Policy

2 Aperdiemisadailyallowancegiventoanindividualperdaytocoverexpenseswhen traveling for work.

3 ThroughNovember2016


processforallowabletravelexpenditures,maximumreimbursementratesforlodgingandmealsandtheconditionsunderwhichexceptionstothemaximumrateswillbegranted.

The District does not have adequate Board-adopted travel policies or procedures. In August 2005, the Board adopted written rulespertaining to travel which identified officers, by title or position,approved to travel for training purposes and established the number of trainingeventseachofficerwasallowedtoattendperyear.However,the rules did not describe allowable travel costs or the travel cost reimbursementprocessanddidnotclearlydefinecost-effectiveandreasonable methods of travel.

Withoutacomprehensivewrittenpolicyfortravel,Districtofficialsdonothaveclearguidelinestodeterminewhetherexpenditureswerenecessary and reasonable.

TheBoardcanchoosetoreimburseofficersandcommissionersformealandlodgingcostsbasedonactualcostsorusingflatdailyrates(perdiemrates).However,perdiemratescannotexceedthestandarddailymealratesallowedforfederalincometaxpurposes(GSAperdiemrates),pursuanttoGML.FiredistrictboardscanalsouseGSAper diem rates to help control lodging costs.

Meals — The Board adopted a resolution establishing a per diem rate of $100 to cover the cost ofmeals and incidentals.However,thisrateexceededtheGSAperdiemrates,whichrangedfrom$46to$74intheareastraveledduringtheperiodreviewed.Wereviewedreimbursements for meal and incidental costs paid to 14 officialstotaling$31,100andfoundthattheDistrictcouldhavesaved$17,600byusingtheGSAperdiemrates.Thisamountrepresentsmorethanhalfof themealexpendituresand16percentof theDistrict’s totaltravelexpendituresduring2015and2016.

Lodging — The Board did not establish a per diem rate for lodging and did not requireDistrict officials to use discounted conferencehotel rates.We reviewed lodging transactions totaling $39,700 for10overnighttrips,madefromMarch2015throughAugust2016,andfoundthattheDistrictpotentiallycouldhavesavedupto$12,800(32percent)ifthediscountedconferencehotelrates,whenavailable,wereused for lodging.4Forexample,fiveofficersandonecommissionerattendedaconferenceinIndianathatrequired17nightsoflodgingatanaverageratepernightof$3545excludingtaxesandothercharges.6

Meals and Lodging

4 Ifwecouldnotdeterminethediscountedconferencerate,weusedthecurrentmarket rate for illustrative purposes.

5 The cost per night varied for weekday and weekend nights.6 Officialsbookedtheirlodgingseparatelyonvariousdatesresultingindifferent

rates at the same hotel.


Atthisconference,twoofficialsstayedineachroomandtheDistrictpaid$6,000forlodging(excludingtaxesandothercharges).AlthoughwecommendDistrictofficialsforsavingmoneybysharingrooms,they may have saved an additional $3,000 (50 percent) had theyobtainedthehotel’sdiscountedconferencerateof$181.

Districtofficialstoldustheydidnotrevieworshopforhotelratesandwould pay the offered rate without asking for reduced government ratesorattemptingtoobtainthediscountedconferencerate.Typically,Districtofficialswouldbooktheirhotelroomsseveraldaysbeforetheconference or sometimes not until arriving at the conference. Because hotels typically offer a limited number of rooms at discounted conferenceratesorspecialreducedratesforalimitedtime,delayedhotel registration can result in the loss of cost savings. The Board approved traveling to the conference in the example above at thereorganizationmeetinginJanuary;therefore,officialshadampletimetobooklodginginadvanceforthisconferencethatoccurredinAprilof that year.

Occasionally, exceptions to maximum lodging and meal rates arewarranted to accommodate special circumstances. However, theBoardshouldperiodicallyreviewGSAratestoensuretheDistrict’sper diem rates are reasonable.

The Board should clearly define cost-effective and reasonablemethods of travel in its travel policy to help ensure that District officialscomplywiththeGMLrequirementsforconferencetravel.

District officials incurred car rental expenditures totaling $2,600whileattending threeout-of-stateconferences.Although theBoardapproved these expenditures for payment, the District could havesavedupto$1,600(62percent)hadtheBoardrequiredofficialstoshare rental cars. For example, four commissioners, the Treasurerandoneofficerattendedaconference together inFloridaandeachofficialrentedaseparatevehicleeventhoughtheconferencewasheldatthehotelwheretheofficialsstayed.TheDistrictpaidrentalcoststotaling$1,500forsixvehicleswhenofficialscouldhavesharedtworentalcarsandpaid$350.Boardmembershadnotevaluatedvehiclerental costs to ensure they were cost-effective or reasonable. District officialstoldusthatofficerswereeachallowedtorenttheirowncarsbecause this is what the District had always done. By comparing vehiclerentalcostsandsharingcarswhenfeasible,Districtofficialscanusetaxpayerdollarsmoreefficiently.

TheBoardmembers’actionscost theDistrict several thousandsofdollars.

Rental Cars


TheBoardshould:

1. Demonstrateprudentuseoftaxpayermoneywhenestablishingtravel policies and traveling on District business.

2. Develop a comprehensive travel policy establishing allowable travel costs, maximum reimbursement rates andclearlydefinedreasonableandcost-effectivetravelmethods,including establishing reasonable guidelines for controlling vehicle rental costs.

3. EnsurereimbursementsformealsarenogreaterthantheGSArates.

4. Monitor conference attendance and travel cost to ensure costs are reasonable and travel is conducted in a cost-effective manner.

5. Plan conference travel, including hotel reservations, inadvance to obtain the best possible lodging rates.

Recommendations


APPENDIX A

RESPONSE FROM DISTRICT OFFICIALS

TheDistrictofficials’responsetothisauditcanbefoundonthefollowingpages.




APPENDIX B

AUDIT METHODOLOGY AND STANDARDS

Toachieveourauditobjectiveandobtainvalidevidence,weperformedthefollowingprocedures:

• WereviewedpoliciesandproceduresadoptedbytheBoard,includingrulesandregulationsand bylaws.

• We reviewed the bank account register for any travel or conference payments.

• Wereviewedallpaymentsrelatingtotravelandconferenceexpendituresforpropersupportand approval.

• WecomparedallpaymentsmadetotheGSAratesformeals.

• We compared all payments made to the available discounted conference hotel rates or market rates (if discounted conference rate information was not available) for lodging.

• We reviewed Board minutes for approval of attendance at conferences and establishment of lodging and per diem rates.

• WecalculatedthepotentialcostsavingshadDistrictofficialsobtaineddiscountedhotelrates(if available) and shared rental vehicles.

WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperform theaudit toobtainsufficient,appropriateevidence toprovidea reasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.


APPENDIX C

HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT

OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/

Toobtaincopiesofthisreport,writeorvisitourwebpage:


APPENDIX DOFFICE OF THE STATE COMPTROLLER

DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller

GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller

LOCAL REGIONAL OFFICE LISTING

BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]

Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties

BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]

Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties

GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOneBroadStreetPlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]

Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties

HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]

Serving:NassauandSuffolkCounties

NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]

Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties

ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThe Powers Building16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]

Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties

SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]

Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties

STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313

Documents

U-Crest Fire District #4 · 2016. We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). ... , please refer to our brochure, Responding