Bookkeeping Flaws Addressed by N.Y. Fire Company

West Glens Falls firefighters may have improperly transferred funds received from a state surcharge on insurance into its association account.

June 14--QUEENSBURY -- West Glens Falls Volunteer Fire Company has changed policies and reinstated the position of budget officer in response to a critical state Comptroller's Office audit.

"I think this audit with the state actually helped us. It woke us up," Pete Flewelling, the department's president, said at a Queensbury Town Board workshop meeting Wednesday.

The state comptroller's audit recently found the department "vulnerable to theft and misuse of funds" and found that, because of inadequate record-keeping, the company was "in effect hiding revenue from the town."

Department officers said a former treasurer, who was a volunteer, was overwhelmed.

He has been replaced with a paid treasurer, who has professional bookkeeping experience, and the department has reinstated the position of budget officer.

Traditionally, the vice president has been the budget officer, but the vice president's office has been vacant.

The department now has a separate budget officer, whose responsibility is to work with the treasurer on financial matters.

The audit, covering Jan. 1, 2012, to Sept. 30, 2013, found the department transferred funds it received from a state surcharge on insurance premiums to the Fire Fighters of West Glens Falls Association, an affiliated organization, without review by the fire company board or documentation of how the money would be spent.

The affiliated association is a separate nonprofit organization the fire company formed in 2007 to own property and accept donations and bequests.

The company improperly transferred $15,819 in "foreign fire insurance proceeds" to the association without the fire company board reviewing the expenditures and without accounting for the expenditures in its records, according to the audit, which the Comptroller's Office released in April.

The department annually receives revenue from a state "foreign fire insurance" surcharge on fire insurance premiums paid to insurance companies headquartered outside New York state.

Joan Durett, the new department treasurer, said she put proper documentation practices in place when she took over, even before the audit was released.

"There is nothing being paid without supporting documentation," she said.

The fire company was unable to provide the Comptroller's Office with receipts to show how $14,053 in surcharge revenue the department received in 2011 was spent.

The audit found the fire company did not adequately monitor fundraising activities.

For example, when the company hosted the 2013 Hudson Valley Volunteer Firemen's Association convention, the company sold tickets for food, beer and soda, and deposited $21,748 in its account.

But fire company officials did not keep records of how many tickets were sold, which would have enabled the company to compare the number of tickets sold with the revenue.

Fire company officials also raised about $1,100 with a car wash, but had no records of how the money was spent.

Chris Kilmartin, coordinator of fundraising, said proper procedures are in place for the convention this year.

"Each sweatshirt, crewneck and hoodie is going to be inventoried," he said.

The audit also criticized the fire company board for not requiring the company treasurer to file the annual financial report in a timely manner, and for not submitting monthly reports to the fire company board.

"As of March 2015, the state will have its 2014 report," Durett said.

The department has agreed to revise its bylaws to include the new policies put in place, said Supervisor John Strough.

"I'm encouraged ... that this department is taking this very seriously," he said.

"It was a somewhat scathing audit, but I think it should have been," said 4th Ward Councilman William VanNess, who is an assistant fire chief with the department.

Third Ward Councilman Doug Irish said there was no allegation that anyone had stolen or misused fire department funds.



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