Audit: $30,000 in missing funds from Pennsylvania firemen's association
The Center Square — The auditor general has asked the district attorney of Centre County in Pennsylvania to investigate a local firemen’s relief association after a financial audit found almost $30,000 in missing funds.
“I’ve asked the District Attorney’s office to take a closer look to determine whether any laws were violated,” Auditor General Timothy DeFoor said in a press release. “Due to the seriousness of this matter, my department will withhold state aid from the association until we have answers.”
Centre County, as its name suggests, in centrally located in Pennsylvania. It is home to Penn State University; Gregg Township is east of the university's main campus, and considered in its metropolitan statistical area.
A June audit of the Gregg Township Firemen’s Relief Association that covered January 2017 through December 2021 had eight findings detailing noncompliance with prior audit recommendations, undocumented spending and unknown withdrawals, inadequate record-keeping, and other problems.
The audit does not accuse the association of breaking the law, but is concerned with poor procedures and documentation.
“Our audits are done regularly to ensure that they are doing their accounting properly,” said April Hutcheson, communications director for the department of the auditor general. “Often, if it’s being referred, it’s because we suspect there’s potentially something criminal going on that is worth further investigation from law enforcement.”
The audit report is "being reviewed and investigated to see if anything further is warranted," Centre County District Attorney Bernie Cantorna said.
The association is a separate legal entity from the fire department. Relief associations are charitable organizations to give financial protection to volunteer firefighters and to encourage local volunteerism. They receive state funds for various uses. Since 2017, the association has received about $15,000 annually in state aid.
The Gregg Township Fire Company declined to comment.
The audit found that about $26,000 was withdrawn from the association’s savings account “without providing adequate supporting documentation for the use or location of these funds.” The withdrawals ranged from $310 to $3,000 over a 20-month period.
The Volunteer Firefighters’ Relief Association Act requires the signature of two relief association officers, but only one person signed off on the withdrawals
“When asked what happened, the Relief Association Treasurer indicated that the documentation from the financial institution was obtained; however, no documentation was provided by the Treasurer,” the report noted.
The audit also noted about $40,000 in undocumented expenditures from February 2019 to March 2021 that “the relief association was unable to provide adequate supporting documentation” to justify. The auditor noted that invoices, itemized receipts, and detailed meetings of minutes are necessary to verify that the spending complies with state law.
“The relief association officials did not provide a reason why this occurred,” the report noted. “When the Relief Association Treasurer was asked why the relief association was unable to provide supporting documentation, he indicated that he had the documentation; however, no documentation was provided by the Treasurer.”
Meeting minutes for 2017 and 2018 were also not available, auditors noted.
“Relief association officials did not provide any response for our numerous requests for meeting minutes,” the report noted. “Nor did relief association officials provide a reason as to why meeting minutes were not signed or why they did not respond to our emails verifying the validity of the meeting minutes.”
The relief association was also criticized for its “inadequate financial record-keeping system” and a failure to maintain a journal of receipts and disbursements for three years, a failure to use a ledger to record transactions, and not maintaining investment rosters for the activity of the association’s investments.
“The goal of these audits is to ensure that all of these funds are being spent correctly and properly,” Hutcheson said.
A referral to the district attorney is relatively rare. In July, the auditor referred an audit of a Westmoreland County relief association to the district attorney, and a February 2021 audit of a relief association in Beaver County was shared with local law enforcement.
In 2021, $54 million went to about 2,500 municipalities for their volunteer firefighter relief associations. The funding comes from a 2% tax on fire insurance policies sold by out-of-state companies in Pennsylvania.
“These are funds that are meant to help and support volunteer fire organizations, so we are working very hard to make sure that they are being spent properly,” Hutcheson said. “It’s important for everyone to understand what’s happening in their local community.”