Monitoring of Financial Operations

Legal Requirements

Rhode Island General Law Section 45-12-22.2 requires that: 

• The treasurer/chief financial officer or other fiduciary, as applicable, of the fire district shall continuously monitor the fire district's financial operations by tracking actual versus budgeted revenue and expense.
• The treasurer/chief financial officer or other fiduciary, as applicable, of the fire district shall submit a quarterly report on or before the 25th day of the month succeeding the end of each fiscal quarter to the division of municipal finance and the state auditor general. 

Elements of the Reports

• Each quarterly report submitted must be signed by the chair of the governing body and the treasurer/chief financial officer. 
• The report shall be submitted to the members of the governing body and the members of the town council. 
• The quarterly reports shall be in a format prescribed by the division of municipal finance and the state auditor general. 
• The reports shall contain a statement as to whether any actual or projected shortfalls in budget line items are expected to result in a year-end deficit; the projected impact on year-end financial results including all accruals and encumbrances; and how the fire district plans to address any such shortfalls. 

Tier I and Tier II Requirements:

• Form FD-3A: Quarterly Reporting Template - 3A

Tier III Requirements:

• Form FD-3B: Quarterly Reporting Template – 3B

Corrective Action Plan

• If any of the quarterly reports project a year-end deficit, the treasurer/chief financial officer or other fiduciary, as applicable, of the fire district shall submit to the division of municipal finance and the state auditor general a corrective action plan signed by the chair of the governing body and treasurer/chief financial officer, or other fiduciary as applicable, of the fire district on or before the last day of the month succeeding the close of the fiscal quarter.
• The plan shall provide for the avoidance of a year-end deficit or structural deficit that could impact future years. 
• The plan may include recommendations as to whether an increase in property taxes and/or spending cuts should be adopted to eliminate the deficit. 
• The plan shall include a legal opinion by legal counsel that the proposed actions under the plan are permissible under federal, state, and local law. 
• The plan shall be sent to the members of the fire district's governing body and the members of the town council.