Fire auditors suggest reforms Separate accounting proposed for county funds for companies

May 01, 1998|By James M. Coram | James M. Coram,SUN STAFF

Half of the first county-paid audits of Carroll's 14 volunteer fire companies were kept secret yesterday, even from the commissioners who ordered them done.

Those that were made public recommended changes in how the companies manage taxpayer dollars.

A Frederick company that audited half of the fire companies recommended that all Carroll fire departments segregate county funds from the rest of their money. Only one of the seven companies did so, according to Richard J. Costantino of Keller Bruner and Co.

When funds are "commingled from a number of sources, it is difficult to determine if purchases are made from county funds or general funds of the fire company," Costantino said.

"This poses a problem especially when purchases are made for nonallowable items in the budget, such as alcohol for an event," he said.

None of the audits of the other companies -- conducted by other firms -- were made available to the commissioners.

The commissioners agreed to ask the county attorney for an opinion about whether the audits could be made public.

The commissioners ordered the audits in December. County tax dollars provide 85 percent of the fire departments' operating budgets this year and will provide 90 percent next fiscal year. The audits cost the county $92,500.

The Frederick company audited the Harney, Mount Airy, New Windsor, Sykesville-Freedom, Taneytown, Union Bridge and Winfield volunteer fire departments.

Other firms audited the Gamber, Hampstead, Lineboro, Manchester, Pleasant Valley, Reese and Westminster departments.

"There was nothing really glaring" in the audits, county Comptroller Eugene C. Curfman, past president of the county volunteer firefighters' association, told the commissioners. "In some cases, they needed a better listing of fixed assets."

Occasionally, the auditors "couldn't find some invoices for particular items," Curfman said, "but they were able to identify the purchases through other sources," such as a canceled check.

There was no hint of anything improper, Curfman said. The checks for payments without invoices were to businesses for items that could be substantiated, rather than reimbursements to individuals for private purchases made on behalf of the department, he said.

Commissioner W. Benjamin Brown asked to review the audits of each fire company. Curfman said there was only one copy available apart from those given to the fire companies. He agreed to circulate that copy among the commissioners.

Brown said he assumed the audits would be made public once the commissioners reviewed them.

When the commissioners ordered the audits in December, they were told by county department heads that the audits would be kept confidential.

Budget director Steven D. Powell told the commissioners that the fire companies are privately chartered and are entitled to keep their finances private.

The "overall results" of the audits would be given to the commissioners and could be made public, he has said, but the audit of each fire company would not be disclosed.

Some fire companies commingle money raised at fund-raisers with county dollars and don't want to reveal their private holdings. Curfman said some companies fear that public disclosure could hurt fund-raising.

Some companies have a large amount of money in bank accounts that they plan to use for major purchases, such as firetrucks, he said, but potential contributors might not be aware that those funds are committed.

The portion of the audit that was made public yesterday included a four-page letter.

Costantino, a principal with the company, began his letter with praise for the "volunteers, employees and board members" in each fire company, saying, "We were quite impressed with the commitment and pride these individuals have." But he said their financial reporting could be improved. The chief reason for recommending that funds not be mixed, Costantino said, "is for tracking purposes."

Keeping separate accounts would reveal whether all county money was spent and could lead to the "potential repayment of unspent funds," he said.

County departments must spend their allocations each year or lose whatever remains. The fire services and some other agencies that receive county funding are not bound by that requirement.

The commissioners said they might require separate accounting as a condition for county funding.

They also might follow another Costantino recommendation and require that fire companies keep no more than $100,000 in any one bank, or "collateralize" amounts above $100,000. The federal government does not insure account balances above $100,000 in any one bank.

Pub Date: 5/01/98

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