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LOSAP Audits: What to Prepare

By Edward Holohan, October 1992

Are your service award programs ready to be audited?

Across the country, there are about 33 states that have service award programs for volunteer firefighters. About a dozen of those states have programs that are very similar to the New York State Service Award Program as set forth in the Article 11-A of the general municipal law of the state of New York.

A common characteristic of almost every one of these programs is that the service award program records are audited annually by a state agency. This observation, we believe, strongly suggests that volunteer firefighter service award programs will be audited in New York State.

When the inevitable occurs, will you the records an auditor would request? Although, to our knowledge, there have not been any service award program audit guidelines issued by any agency for volunteer fire department personnel, here are some suggestions regarding the records that would be audited.

1. Financial accounting of service award program assets. You should be able to fully account for all changes in the plan assets from the beginning of each year to end of each year, and you should prepare a statement at least once a year that itemizes and summarizes the changes. Moreover, at the end of each year, you should attach to the summary of plan asset changes, copies of the statements from the insurance company, investment firm or bank to show the total invested assets plus receivables minus payables equals the total assets as the last day of the plan year.

2. An annual year-end list of all the active volunteers in your department during each year, including those that made the 50 points and those that did not make the 50 points as well as those that did not participate in the program because they were ineligible or because they waived participation.

3. Keep copies of meeting attendance sheets, drill sign-in sheets, call sign-in sheets, etc. The manual or computerized system that you use to calculate points for the year, probably shows the points earned by a volunteer in each category during the year, and may even indicate the specific drills, meetings, calls, etc. that the volunteer participated in during that year.

4. In addition to requesting copies of lists from your point record-keeping system, an auditor could request verification of a volunteer’s points earned by requesting copies of the source documents. Source documents include sign-in and attendance verification at meetings, drills, etc. These documents should be stored in a safe place with duplicate copies stored at a secondary site.