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Fire District Audit Threshold Increased to $400,000

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Last week, the Governor signed an amendment to the General Municipal Law and the Town Law, increasing the revenue level at which fire departments and fire districts are required to obtain an audit from $300,000 to $400,000. The new thresholds are effective as of November 11, 2020.

As a result of these amendments, fire companies with revenues of $400,000, that contract with a city, town, village or fire district to provide fire service are required to obtain an annual audit of their records by an independent certified public accountant or an independent public accountant. [NY Gen. Municipal Law Section 209-z]. Fire districts with revenues of $400,000 are also required to obtain an annual audit by an independent certified public accountant or an independent public accountant. [NY Town Law Section 181-b].

The sponsor’s memorandum in support of the bill explains the justification for increasing the threshold:

The fire districts of New York State are experiencing an increase in the
cost of goods and services. This constant rise in costs has brought fire
districts close to exceeding the $300,000 limit on an annual basis.
Under current law, if a district exceeds the $300,000 revenue limit an
audit must be done. However, the cost of this audit is an additional
cost to the taxpayers. This burden grows further if the district exceeds
the limit regularly. This legislation allows for further expansion of
services the district can provide without any unnecessary burden on the taxpayers to pay for annual audits. This limit was last raised in 2013.

Sponsor’s Memo for Bill A10041 [L.2020, ch.262]

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This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.


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