Fire district implementing audit findings

Hampton Bays Fire District officials agreed to set up new policies after a state comptroller's audit found the district's treasurer improperly reserved more than $300,000 in a fund balance the comptroller said could have been used to pay bills or decrease taxes.

The report also noted the district paid bills before they were approved by the fire commissioners, and did not always follow proper competitive bidding practices.

The district will prepare a "corrective action plan" and has already remedied a number of the findings, said the district's written response.

"We found that the treasurer improperly reserved $310,940 of fund balance for encumbrances that did not exist. As a result, the district understated its available fund balance," said the report by the office of state Comptroller Thomas DiNapoli. "The district could have used these improperly encumbered moneys to increase its capital reserves, pay off debt, finance one-time expenses, or reduce district property taxes."

While the district said it does not believe the holding of such funds affected the district's budgeting, it agreed that the recommendations by the comptroller's audit were "an improvement upon the policies, practices and methodology which had already been in use by the district."

The report also noted that of 30 claims reviewed from January 2009 to February 2010, 15 claims totaling $72,730 were paid before the board approved them, as is its fiduciary responsibility.

The district has already implemented new policies to fix that, officials wrote in the response.

In addition, the district entered into four vendor agreements totaling $55,168 "without soliciting competitive bids, or any other form of competition," said the report. The district also made 47 purchases where the purchase orders were dated after the invoices were received, said the report.

"The report was more a matter of methodology than about the results," said the district's attorney, Stanley Orzechowski of Nesconset. "They will adopt any additional policies that might be needed, some of which they have already done."

The report also said the district should tighten security for its computer system, which officials agreed to do.