... there is a catch, though. You have to move to PA, and pretend to represent a FD which was closed in 1937 :rolleyes: .
Audit uncovers $11 million stockpile in volunteer firefighters' relief association.
Money intended to protect firefighters is being hoarded and paid to top VFRA officials.
Casey refers audit report to IRS and Pennsylvania Attorney General.
February 26, 2004
AG-045-04 Harrisburg VFRA Audit Text
HARRISBURG (February 26) -- A state-funded non-profit organization that is supposed to provide fire safety equipment, training, and benefits to current and former volunteer firefighters in the City of Harrisburg is little more than a secretive social club that exists to compensate the club's top officials and maintain the clubhouse, according to a scathing new audit released today by Auditor General Robert P. Casey, Jr.
Casey said the Harrisburg Volunteer Firefighters' Relief Association (VFRA) is sitting on a stockpile of at least $11 million, even though all but 2 of Harrisburg's 16 volunteer fire companies shut down their fire stations and disposed of their fire fighting equipment between 1937 and 1980.
In fact, most of the members of the Harrisburg VFRA's Board of Directors purport to represent volunteer fire companies that have not provided volunteer fire service to the City of Harrisburg for several decades. Fourteen of the original 16 fire companies have no active volunteers, no fire fighting equipment or apparatus, no fire stations, and no mailing addresses. These companies, which the VFRA claims are still active, were housed in buildings that have since been closed, sold, boarded-up, razed, or - in one case - turned into a restaurant.
"VFRA funds are supposed to provide essential protective equipment and benefits to the volunteer firefighters who bravely serve our communities," Casey said. "They are not to be used by a select group of individuals as an investment club for their own private benefit."
The Harrisburg VFRA is a non-profit organization established primarily for the purpose of affording financial protection to volunteer firefighters who suffer misfortune as a result of their participation in the fire service. According to the City of Harrisburg, there are only 23 volunteers currently qualified and authorized to assist the City's paid firefighters.
Casey's audit questions whether the Harrisburg VFRA is meeting its statutory purpose in light of the fact that only a very small portion of its available resources actually go to support fire services or pay benefits to current and former volunteer firefighters. The VFRA refuses - as it has for over a decade - to provide the Department of the Auditor General with a current, complete and accurate membership roster. Of the nearly 2,000 VFRAs in Pennsylvania, the Harrisburg VFRA is the only one that refuses to provide this information to the Department of the Auditor General.
According to Casey, from January 1, 1998, through December 31, 2000, the Harrisburg VFRA had assets of almost $11 million, including over $1.8 million in new investment earnings. However, during this same three-year time frame, the VFRA spent just over $62,000 for fire equipment and training, which was less than four percent of its investment earnings, and paid just under $106,000 for benefits to current and former volunteer firefighters, which was less than six percent of its investment earnings.
"uring the audit period, the VFRA spent considerably more for 'administrative services' than it paid for fire equipment, training and benefits to current and former volunteer firefighters combined," Casey said.
In fact, according to documentation provided by the VFRA, benefits were paid over a period of almost six years to just 14 claimed VFRA members. However, during the three-year audit period, the VFRA compensated 29 claimed members over $151,000 for serving as VFRA officers and directors - even though some Board members claim to be affiliated with a volunteer fire company that has not provided active volunteer fire service for more than 63 years.
Although reasonable compensation for officers and directors of a VFRA is typically permitted under Act 84, the Volunteer Firefighters' Relief Association Act, Casey said that Harrisburg VFRA officials refuse to provide supporting documentation to validate that the fire company delegates are authorized to serve on the Board of Directors and to elect officers.
Moreover, without a membership roster, Casey cannot verify that VFRA benefits have been appropriately paid only to eligible members.
In a letter to Mayor Stephen Reed, which accompanied a copy of his audit report, Casey recommended that city officials review the current situation to determine if dissolution of the relief association, as described in Act 84, is an appropriate course of action.
Casey also provided a copy of his audit report to the Internal Revenue Service, the Office of Attorney General, and the Pennsylvania Department of State for their review.
In response to the audit, officials representing the Harrisburg VFRA questioned the Auditor General's audit authority; distorted, misquoted, and challenged the audit's findings; and expanded the time frame covering the VFRA's expenditures beyond the audit period to drastically overstate the amount of disbursements.
Each of the Commonwealth's nearly 2,000 VFRAs receives state aid based on a two-percent tax on fire insurance purchased by Pennsylvania residents from out of state insurance companies. This aid is distributed to each municipality in which volunteer firefighters provide fire protection services. The municipalities then allocate a percentage of the money to local relief associations. During Casey's audit period, the Harrisburg VFRA received state aid from the City of Harrisburg.
Click here for Audit Report.
What, do you suppose, they'll do with the 11 mil?
They may need it for attorney's fees when they get indicted for fraud!
Sounds like a good time for someone to turn State's evidence and make a deal.
Firefighters group has $14 million
Friday, February 27, 2004
BY JOHN LUCIEW
Of The Patriot-News
A Harrisburg volunteer firefighters association is sitting on a bank account of more than $14 million in a city where most of the fire protection is provided by paid professionals.
That was enough for Auditor General Robert P. Casey Jr. to wonder about the extent of the nonprofit group's membership and to advise city officials to consider dissolving it.
In a scathing audit, Casey pointed out that the Harrisburg Volunteer Firefighters' Relief Association has used hardly any of its money for training or equipment to protect volunteer firefighters -- the nonprofit group's core mission under state law.
Instead, the group spent $151,000 between 1998 and 2000 to pay its board members to attend meetings.
However, the audit found no evidence of any illegal misuse of funds.
Despite requests, the association would not turn over its membership roster to auditors, leading to questions about how many members the group has.
Among the volunteer fire companies the group represents, 14 are defunct, some for as long as 63 years.
"We believe it is no longer representing active volunteer firefighters," said Karen Walsh, a spokeswoman for Casey.
There are nearly 2,000 volunteer firefighters relief associations across Pennsylvania, and all must have at least five active members or risk being disbanded.
No other group in the state had near the funds of the Harrisburg association, auditors said. Just nine associations had above $1 million.
Casey has asked the IRS, the Pennsylvania Department of State and the state attorney general's office to investigate whether the group still deserves its nonprofit status.
Mayor Stephen R. Reed, who Casey asked to look into the group, released a statement promising a "very careful review." But the statement stopped short of outlining any specific action that may be taken.
Association President Henry Young, executive editor of The Patriot-News in the 1980s, said the group, which has been around since 1897, is being penalized for making good investments.
Last year alone, the group increased its holdings by $2.5 million, or more than 30 percent, mainly through investment returns.
"We have a big bank account. So what?" Young said.
He said the funds would be used to pay death benefits to current and former volunteers and to support deceased firefighters' families in the event volunteers are killed on duty.
"We still have volunteer firefighters in this city," Young said. "Fire service is a dangerous service. Tomorrow, we could have a fire, and a collapse could kill eight or 10 volunteers. I got to have the money to take care of the families and see the kids all the way through school."
In addition to the city's 100 paid firefighters, Harrisburg has 23 active volunteers certified to respond to fires and other emergencies.
The association lists 29 board members, who meet monthly. Young said the membership list is private.
The volunteer association spent just $95 on training during the four-year audit period, while $62,000 went for protective equipment and $50,000 for death benefits.
"The city and the relief association should sit down and use a large percentage of that money to purchase fire equipment," Casey said.
City spokesman Randy King said a request totaling $200,000 for air tanks and other equipment for the city volunteers is pending before the group. However, the organization is a separate entity, outside of city control.
In 2000, the auditor general's office stopped paying the association its share of the nearly $59 million a year distributed by the state to the 2,000 volunteer firefighter associations across Pennsylvania.
The state money comes from a 2 percent tax on fire insurance premiums paid to out-of-state companies. The Harrisburg group's share was about $12,000 a year.
But the group has earned far more through its investments, growing its holdings from $11 million at the conclusion of the audit to more than $14 million. If dissolved, the group's holdings would revert to the city's pension fund for paid firefighters.
Some background and some more information ...
Harrisburg city has 16 (I think) FF's per shift. They do allow volunteers to run, as long as they meet all of the training requirements, and are on an approved list. This total is about 25 guys. On a Friday or Saturday night, you might have one or two volunteers ridings. That's it. I hate to say never, but I will ... you will never see 8 to 10 volunteers riding all at the same time. The only time you would see 8 to 10 volunteers actually in the city is if a fire goes to 3 alarms. These volunteers would not be covered under the Harrisburg VFRA because they are members of their own company's relief association. Furthermore, I highly doubt many, if any, of the approved Harrisburg city volunteers are members of the Harrisburg VFRA.
This has now become the sticking point ... the association has spent $70,000 on equipment on the two new Harrisburg city KME towers. They have spent $62,000 on gear. They have a proposal to spend $200,000 on SCBA ... but where are the volunteers? These items are being justified by saying that they are protecting the volunteers. Yet, the association can't provide a membership roster. To top it all off, the association is taking the rather arrogant approach of "So what if we have $14 million." and "There's no law that says that we have to provide a membership roster." Note that the law does state that they have to have one, but it does not state that they have to turn it over to the Auditor General.
Stayback ... your question was answered at the end of the article. I'm not quite sure why a fund which was set up to protect and support volunteer FD's reverts to a paid FD's pension if dissolved (as opposed to the remaining volunteer relief associations) ... but that's what it says.
A little background on a relief association ... each VFD has a relief association, which is funded based on property values in your first due area. The money in the fund can only be used for items pertaining to FF safety. There is a specific list of items which can be purchased w/ relief money (i.e. gear, radios, SCBA, handlights, generators (on apparatus), warning lights, halligan bars (only tool allowed), TIC's, cascade/air systems). Hence, many departments run into the problem of having decent gear, yet no fuel in the apparatus, and no heat in the firehouse.
I'll post on here when new things happen. There is a lot of activity on our local forum on this.
It does seem as though this organization has a huge commitment to training these volunteers. Hell, they spent 95 whole dollars on it.
With $14 mil, they ought to be sending each of them to college.