April 25--New York Comptroller Thomas DiNapoli's office audited Rescue Fire Company in North Tonawanda, finding $13,754 in money generated by the fire hall bar is missing and fire hall officials couldn't produce receipts showing where the money went.
Though fire officials didn't return messages seeking comment, the fire hall president, Larry Kuebler, wrote in response to the audit the money was likely spent as "gratuity to volunteer members who serve as bartenders."
The company, which contracts with the city of North Tonawanda to provide fire protection services, operates a bar five days of the week for the department's members. A four-member bar committee is supposed to oversee the bar's financial operations.
The comptroller's audit revealed $23,754 in cash from the department's bar sales between January 2010 and January 2013 went unaccounted for.
Auditors discussed the issues with department representatives on Aug. 21, the report states. The fire department officials said that the bar committee chairman was able to account for about $10,000 of the missing money and comptroller officials reduced the amount of unaccounted funds to $13,754.
"Company officials told us that over the last several years, the bar committee chairman was able to divert cash from the cash register in the bar without their knowledge," the report states. "Had someone other than a member of the bar committee compared the bar cash register tapes and the cash reports to the amount deposited, they may have determined that not all cash recorded as collected through the cash register was deposited, and taken corrective action to address the diversion of money."
The comptroller's office also said that bar tabs paid by cash and check are not always run through the register, and hall rentals are also paid at the bar -- so the amount of unaccounted money is likely greater than the records can show.
According to the comptroller's report, the department did not properly audit the bar's records every three months and report its findings. Bar committee members "routinely" paid for bar purchases with cash from the bar's revenues without consulting with the department's treasurer.
"These purchases should have been paid by the treasurer after they were reviewed and approved for payment by the board. Furthermore, although company by-laws require the treasurer to make all company deposits, the treasurer did not do so," the comptroller's report reads.
The co-chairman of the bar then deposited cash from the bar sales in the bank once each month and did not compare the amount deposited to the cash reports showing what was collected. He left about $1,000 in a safe for committee members to use for bar purchases.
The comptroller's office issued four recommendations to the fire department's board:
--The board should require bar committee members to have a second member present while conducting cash counts and adding or removing cash from the safe.
--The treasurer should deposit all bar cash collections in the bank more frequently than once each month.
--The board should review and approve invoices representing the purchase of bar supplies prior to the treasurer making payment.
--The company audit committee should conduct an audit of the bar's financial activity and report its findings to the board. The report should include comparisons of cash reports to the amount deposited.
Kuebler, said the board recognizes the problems and has taken steps to correct them. The board is preparing a written correction action plan and will provide the comptroller's office with proof of its implementation, Kuebler wrote.
The board "acknowledges the issue of unaccounted-for bar cash. The explanation of that shortfall is, in essence, gratuity to volunteer members who serve as bartenders," Kuebler said.
Copyright 2013 - Tonawanda News, North Tonawanda, N.Y.
