Audit: Finances of Md. Fire Departments Lack Oversight

Fifteen of Montgomery Countys 18 volunteer fire and rescue departments misused state grant funds and made unauthorized purchases in the last fiscal year, creating the potential for fraud and abuse, county-commissioned auditors found.

Auditors with the firm Rager, Lehman & Houck found errors related to state grants in six departments. For example, the Cabin John Park Volunteer Fire Department spent $50,000 in grant funds on materials that were supposed to be paid for using money the department had raised privately, according to auditors. The funds were replaced when the error was discovered.

The opposite problem occurred at the Silver Spring Volunteer Fire Department, where $17,002 of taxpayer money was spent when state grant funds were supposed to be used instead.

At the Gaithersburg-Washington Grove Volunteer Fire Department, the checking account holding state grant funds was overdrawn. In a response enclosed with the auditors memo, department Treasurer Garry Walker attributed the incident to the loss of the administrator who previously oversaw the account and said the funds were replaced within 24 hours.

Likewise, the Glen Echo Volunteer Fire Departments taxpayer fund account was overdrawn. And the county tax fund owes the departments private fund which consists of money raised in private fundraising efforts $7,228.

At four fire departments Germantown, Glen Echo, Laytonsville and Upper Montgomery County purchases were not approved, were approved after they were made, or lacked documents showing that they were approved.

At the Damascus Volunteer Fire Department, the current treasurer does not have check-signing authority, while at the Germantown, Sandy Spring and Upper Montgomery County departments, people who are no longer on the board still have check-signing authority. This is a weakness in internal control and increases the potential for fraud or other abuse, the auditors wrote.

Other errors included bank accounts and records that dont reconcile, and other procedures that violated county regulations.

Many of the errors can be attributed to the loss of the 19 full- time administrators who oversaw the departments finances and were fired halfway through fiscal 2011 in a budget-cutting measure, said Montgomery County Volunteer Fire and Rescue Association Executive Director Eric Bernard. The county also set the volunteers up to fail by not giving the departments their state grant funds for 18 months, requiring them to use other funds during that time.

Because Bernard and the leaders at most of the volunteer departments did not see the auditors findings before Wednesday afternoon, he said he could not comment on the specific errors.

County fire department spokesman Assistant Chief Scott Graham declined to comment before Thursdays Montgomery County Council Audit Committee meeting, where the findings will be discussed.