Auditor asks improvements in fire companies' reports

August 14, 1994|By Phyllis Brill | Phyllis Brill,Sun Staff Writer

An auditor's review of financial statements of Harford County's 12 volunteer fire companies suggests that their reporting methods could be improved and that their financial activities should be audited regularly by an independent certified public accountant.

But County Council auditor Michael Treherne, who reviewed the companies' financial statements at the council's request, said he found nothing seriously objectionable. He told the council that his review was not a complete audit.

Mr. Treherne, who summarized his findings at the council's meeting Tuesday, suggested that all annual financial reports of the companies should be prepared on a "review" basis by an independent certified public accountant in accordance with accounting principles. Currently, he said, the reports are basically compilations of cash receipts and cash disbursements.

He also suggested standardizing the fire companies' financial reporting structures so operations of one could easily be compared with those of another.

"I look at the volunteer fire companies as one need of the county met by 12 entities," he said. "So the reporting should be standardized."

The review was prompted by the annual budget approval process, in which the County Council each spring must vote on the county executive's proposed operating and capital budgets for the coming fiscal year.

Harford officials, who contributed about $2.7 million annually toward the 12 companies' operating expenses in the last three years, agreed to increase the county's contribution to $3 million in fiscal 1995.

The 12 companies provide fire and emergency medical services in the county. Harford is the largest metropolitan county completely dependent on an all-volunteer firefighting force, Mr. Treherne said.

He also recommended that the county make quarterly appropriations to the volunteer fire companies instead of making the full appropriation to each of them once a year. He said the county could have increased its investment earnings on the money by about $40,000 in fiscal 1994, based upon a 3 percent rate of return.

But Councilwoman Joanne S. Parrott reminded Mr. Treherne that the lump-sum payment to the fire companies allows them to use the money as collateral in securing bank loans for capital projects they sorely need.

"So, do we give the $40,000 savings to the fire companies or to the county as a whole?" she asked. "I think the 1,200 volunteers are giving the county more than that in return."

"The volunteer system is saving the county millions of dollars a year," Mrs. Parrott said after the meeting. She said it would cost Harford about $23 million to support a professional fire department.

Mr. Treherne said his review was based on information in the fire companies' financial statements from fiscal years 1992 and 1993, as well as consultations with James Jewell, the county treasurer, and Thomas Zecha, chairman of the Fire Chiefs Association's Budget and Finance Committee.

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