GERMANTOWN—Roy Brown, former town supervisor and now chairman of the Board of Fire Commissioners of the Germantown Fire District, took the opportunity at a recent Town Board workshop meeting to respond to the state audit of the fire district.
Mr. Brown pointed out that he had been elected a commissioner only in January “and was promoted 30 seconds later” to chairman. “Three or four weeks later, I got a notice saying that the state was going to do an audit,” he said.
The audit, conducted by the Office of the State Comptroller, covered the period January 1, 2013 through March 4, 2014. During that time, the audit found that:
The District had four reserve funds totaling $398,000 as of December 31, 2013, but district officials could not find the original documents that established the reserves, or any written procedures for their funding and use.
The District’s reserve funds increased from $142,836 as of December 31, 2009 to $398,000 as of December 31, 2013, or about $64,000 per year. This happened because the board overestimated budget appropriations and then placed surplus cash into reserve funds.
Funding reserves in this way “did not provide the taxpayers with an accurate picture of what their taxes were actually being used to fund,” said the audit. “A more transparent and appropriate method of funding reserves” would be to estimate appropriations more accurately and include a specific budget line for funding reserves.
In the meantime, “The District has no formal plans to use the $398,000 in reserve funds to replace trucks and equipment,” said the audit.
“We have set a lot aside, but every 10 years we have to replace firefighting gear,” said Mr. Brown, which, he said, comes with an expiration date. There is $80,007 in a Personal Protective Equipment fund, according to a chart in the audit, in addition to $20,088 for radios (which Columbia County may pay for), $108,357 in the building reserve and $189,548 in the truck reserve.
“What struck me about the amount of the reserves was that it was excessive because each year the budget was higher than the expenses,” said Kay Abraham from the audience. “Like the school,” she added, referring to the huge reserve the Germantown Central School District had amassed as of last year, after regularly overestimating expenses.
“Comments I heard were that things were casual” in the fire district, said Ms. Abraham, “not written down to make any sense, and these kinds of aberrations developed along the way.”
Mr. Brown agreed, saying that he was now setting up a schedule, for example, for vehicle replacement.
“There are so many mandates on replacing things,” he said.
“Because a volunteer’s equipment fails and something terrible happens,” said Ms. Abraham.
In addition to the reserve funds, the audit found the district did not have policies and procedures for key financial functions including budgeting, cash receipts and disbursements, computer and Internet use and travel.
Further, the district’s policies for procurement and investments were adopted in 1995, but actions taken since then weren’t documented and at times were inconsistent with the policy. For example, the policy requires employees to obtain two verbal quotes for purchases between $250 and $2,999, but this was not done.
“They dinged us because a couple of the commissioners said they didn’t know where the policy was,” said Mr. Brown, so the auditor concluded “the board hadn’t reviewed the policy every year, as we’re supposed to.”
As suggested then, the board has worked on policies for drugs, alcohol, social media, workplace violence, ethics and harassment, including sexual. Those policies were adopted before the audit was complete, said Mr. Brown. Policies on procurement, travel and credit card use “will be done by the end of this year,” he said.
Mr. Brown also said that previously the board’s treasurer had handled all aspects of financial transactions, but in October 2013 the district instituted new procedures, dividing chores such as reviewing incoming mail and canceled checks among different commissioners. At the board’s monthly meeting, the commissioners approve a list of bills for payment and discuss major purchases and their timing.
While all disbursements seemed to be properly authorized and spent, the comptroller’s office found two missing checks. One was accounted for, but the other one could not be.
The board risked a conflict of interest when it did not properly award a contract for cleaning services in 2013 when it renewed its contract with the spouse of a commissioner. The contract was originally awarded in 2011, for $4,800 and at that time was properly bid out and awarded based on the lowest cost, the audit found. At that time the commissioner disclosed his interest and recused himself from voting.
When the district renewed the contract in 2013, it did not use a competitive process and had no record to indicate that the agreement was the lowest dollar offer. Further, there was no record in the meeting minutes of the Commissioner recusing himself from voting.
Mr. Brown responded that the spouse had done the cleaning the previous two years, and rather than go out for bid, that person kept the price. Further, he said, the commissioner recused himself, saying, “I think he left the room.” These actions were not in the meeting minutes, however. “Three chiefs said he definitely abstained,” said Mr. Brown. “I respectfully disagreed with the comptroller’s office, but it’s true, it wasn’t in our minutes.”
“This year,” he said, referring to formal requests for proposals, “we’ll RFP everything—attorney, cleaning, mowing, we’ll put it all out for bid.”
“I think the commissioners were trying to be proactive with the comptroller’s recommendations,” Mr. Brown concluded. “They began the process before I came on board.”