 |
| Auditor General Eugene DePasquale |
The Pennsylvania auditor general is seeking additional investigation of the Feasterville Volunteer Firemen’s Relief Association after a state audit found deficiencies in financial and administrative areas, including personal loans to members and unaccounted for investment money.
The auditor general withheld nearly $76,000 in state funding last year from the Lower Southampton association as a result of the state's most recent audit. The association “did not, in all significant respects, receive and spend state aid and collect relief funds in compliance with state laws, contracts, bylaws and administrative procedures,” according to the 2015 audit report.
The association is affiliated with the Feasterville Fire Company, but is a separate entity that receives state funding.
These key deficiencies were cited in the most recent audit of the relief fund, which covered Jan. 1, 2011, to Dec. 31, 2013, and was released in January 2015:
• The relief association gave seven personal loans to association members who are also volunteer firefighters, including a $2,000 loan that was forgiven “in lieu of a wedding gift.” Personal loans aren't an authorized use of relief association money, according to the state.
• The auditors were unable to independently confirm $145,838 reportedly invested through Fidelity Investments because Fidelity said the association hadn’t provided it with proper documentation.
• There was no paperwork documenting how some association money was spent. The audit said the association was informed about undocumented expenses in a prior audit but didn't establish adequate internal controls. The state audit also noted that the lack of supporting documents, such as invoices, made it impossible to determine if the money was spent in compliance with state law.
• While the association provided auditors with bank statements, it didn't produce copies of canceled or imaged checks, according to the report. Without those, auditors couldn't determine whether at least two association officers authorized the checks as required by state law, the audit stated.
• The relief association’s vice president, Brian Walter, was performing secretarial duties, which the audit stated was “inappropriate” since he's also the group's treasurer. The duties of secretary and treasurer must be “sufficiently segregated” as a “primary internal control to decrease or prevent the risk of errors and irregularities,” the audit noted.
• The association failed to provide meeting minutes addressing all the financial transactions that occurred during the audit period. The minutes that were provided showed business was conducted even without a quorum of members present as required by the group's bylaws, the report found. “Without detailed minutes of meetings and the required quorum, evidence that relief association business was presented before the membership for proper approval does not exist,” the report found. The lack of meeting minutes was also an issue in the 2006-07 and 2008-10 audits.
Auditor General Eugene DePasquale said it's unusual for his office to forward audit findings to prosecutors for further investigation. He said that happens with only about 10 of the roughly 5,000 audits his office completes annually.
“We know (DA staff members) have it and they are taking it seriously,” according to DePasquale, who said the association has told his office it is correcting the deficiencies. Once that is done, he said, the money will be released.
Marc Furber, chief of the Bucks County District Attorney’s Arson and Economic Crimes division, declined to verify if an investigation is being done.
Calkins Media was unsuccessful in attempts to reach the relief association’s president, David Walter, who's also deputy chief of the Feasterville Fire Company, and his brother, Brian Walter, who is assistant fire chief and a relief association member. Phone calls were not returned. No one answered the door at their homes and they didn't respond to a reporter who left business cards at their homes.
Feasterville Fire Company Chief Frank Walter, who's not a relief association officer, declined to comment about the audit. He is the father of Brian and David Walter.
Pennsylvania has about 1,900 firefighter relief associations. Their primary purpose is to support affiliated fire companies with funds for equipment and firefighting training, and help volunteer firefighters who need financial assistance as a result of their service.
The $75,848 state allocation withheld last year is the organization’s sole funding source, according to the state. Since 2006, the Feasterville relief association has received $774,590 in state funds — money that comes from a 2-percent tax on out-of-state businesses that sell casualty and fire insurance in Pennsylvania, auditor general spokeswoman Susan Woods said.
The state withheld $89,539 in 2010 after the relief association failed to correct deficiencies found in an earlier audit, according to Woods, who said the state released that money to the group in January 2011 after it was satisfied with the association’s compliance efforts.
Calkins Media reviewed three cycles of compliance audits for the Feasterville relief association, covering 2006 through 2013. All the reports found that the association failed to address deficiencies involving inadequate material internal controls, including undocumented expenses and inadequate meeting minutes. The audit findings were forwarded to relief association officers and the secretary of the Lower Southampton supervisors. The supervisors referred all questions about the audit to township solicitor Michael Savona.
In an email, Savona said the township became aware of the deficiencies after the audit was released in January 2015. Relief association representatives told township officials last spring they were cooperating with the state to resolve “any and all audit findings,” Savona said.
As of September, township officials learned the auditing issues weren't cleared up, according to Savona. He said the township ordered an audit of the Feasterville Fire Company because it receives local tax money. He said no irregularities were found in the audited accounts that receive tax funds.
Jo Ciavaglia: 215-949-4181; email: jciavaglia@calkins.com; Twitter: @JoCiavaglia
No comments:
Post a Comment