Overview
DFS did not collect appropriate documentation to support expenditures for earmarked funds. Out of 20 communities we tested, 6 did not have supporting documentation for earmarked fund reimbursements. These reimbursements totaled approximately $75,000 for our audit period. In addition, DFS did not have supporting documentation for the expenditures related to 9 Student Awareness of Fire Education (SAFE) Program grants, out of 56 that we tested, totaling approximately $32,000 for the audit period. Without adequate supporting documentation, DFS administrators cannot ensure that disbursed funds are used for their mandated purposes.
Authoritative Guidance
DFS’s chief financial officer and director of administrative services told us in an interview that to be reimbursed, communities must provide the director of operations with good supporting documentation, including invoices, packing slips, etc.
Additionally, as a condition of receiving SAFE Program grants, cities and towns are required to provide the following documentation to DFS: a Year End Narrative Report, a completed Year End School Activity Worksheet, a Year End Community Report, a Student and Instructor Evaluation Report including evaluation results, and a Budget Page signed by the chief of the department.
Reason for Issues
The director of administrative services stated that there are no specific, documented policies, procedures, or controls regarding earmarked funds.
Recommendation
DFS should develop policies and procedures for the administration of earmarked funds, including the documentation required to ensure that funds are used for their mandated purposes.
Auditee’s Response
While the Department of Fire Services has financial policies and procedures, as well as control measures, which preclude the potential for waste, abuse or fraud, it recognizes that it has no specific policies and procedures related to the issuance of grants and associated grant expenditures. The Department of Fire Services will develop grant policies and procedures to ensure that grant awards are used for authorized purposes. These policies and procedures will include a consistent process for the submission and review of reimbursement requests, as well as ensuring a percentage of randomized site visits to perform financial reviews of recipient records and verification of programmatic activities associated with the grant.
Auditor’s Reply
Based on the response above, DFS is taking measures to address our concerns about the administration of earmarked funds.
| Date published: | May 12, 2020 |
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