Bluefield Daily Telegraph, Bluefield, WV

October 9, 2013

Mercer County Fire Board speaks out on fund misuse accusations

By CHARLES OWENS
Bluefield Daily Telegraph

PRINCETON — State auditors went over several compliance issues Tuesday with members of the Mercer County Fire Board as it relates to the agency’s bookkeeping and financial records. Members of the fire board, in return, expressed their frustrations over how the process was handled, including the execution of a search warrant and the seizure of agency records on July 2.

“It’s done,” Gene Buckner, a member of the Mercer County Commission and the fire board, said. “It’s been proven there was no misuse of funds or embezzlement.”

Phillip Ball, attorney for the fire board, said state troopers who executed a search warrant on July 2 at the fire board offices at the Mercer County Courthouse were only present to help state auditors collect records. Ball said the West Virginia State Police are not conducting an investigation of their own. He said the questions raised by the auditors have been answered, and the inquiry has concluded.

Kathy Short, manager of the fire board, said state auditors should have given the local fire board members a chance to explain their bookkeeping procedures before executing a search warrant and seizing records.

“I feel like we were treated unfairly in that we were never given a chance to explain ourselves,” Short said to Donna Cork and Charlie McKinney, representatives of the state auditor’s office who attended Tuesday’s fire board meeting. “We were just in there doing our job, and three state troopers come in and slammed this book in our face and told us we need to get out. Then the press is right there behind them. And it gets written up in the newspaper that we may be embezzling money. Can you imagine what this does to us? I just want to stress this so maybe you can better understand how devastating that can be when it gets out in the public. Then you start playing mind games with yourself. What is the next step? Are they going to come in here and put handcuffs on us?”

Short called the whole situation a “fiasco” which she said hurt the image of the fire board. She said some customers threatened not to pay their fire fees after an article about the seizure of the fire board records appeared in the Daily Telegraph on July 3.

Short also questioned if state auditors tipped off the press about the search warrant and seizure of records at the courthouse on July 2. Cork and McKinney said the state auditor’s office didn’t call the press.

Although nothing was criminal in nature, the audit still revealed several non-compliance and internal control issues, which Cork and McKinney addressed Tuesday.

Cork said the first compliance issue dealt with the segregation of office duties. The apparent problem dealt with the fire board having only two people in their office taking payments. Cork said this particular finding is not unusual as the fire board is a small agency that may not have the ability to hire the five or six employees that would be necessary to address the compliance concern. The board members were asked to agree to a draft statement saying that due to budget constraints the fire board members are not able to hire additional employees at this time.

“A non-compliance is a violation of state code and the law, but not necessarily something that is criminal,” McKinney said.

The auditors also addressed bookkeeping concerns with accounts receivable at the fire board. The problems were apparently linked in part with delinquent accounts that were turned over to collection agencies. Funds collected from county fire fees are distributed among the volunteer fire departments in the county.

One of the questions dealt with payments for 2012, and advance payments for 2013. Short said a line item financial report of accounts collected by the fire board, as well as accounts collected from a collection agency, is published annually in the Daily Telegraph.

A third area of concern addressed by Cork and McKinney was an internal compliance finding dealing with a cashing of personal checks. But Short said county residents would often send in payments for two years, or a past due debt and current bill.

“We’ve never been told not to cash checks,” Short said. “But it has stopped.”

Short said the fire board has followed the same procedures for 23 years, which has never been questioned in past audits.

Cork said a fourth compliance concern dealt with cash collected being less than supporting documents. Buckner asked Cork to explain why the numbers didn’t add up.

“I don’t know why,” Cork said.

“There is a good explanation,” Short said. “If someone had just came and asked a question it all could have been resolved.”

Short said the question dealt with advance payments.

“You can’t hold a check for six months,” Short said. “So what we would do is cash out that check. Instead of sending that check back, we just cashed it out of our drawer and hold it for 2013. Then we kept a log to hold payments called advance payments.”

Once again Short said the fire board had been told by state auditors that this process was allowed.

“We were told we could do that as long as we could keep advance payments in a separate location,” Short said.

The board members were asked to agree to a statement that said the county fire board will evaluate the current deposit process and make the necessary corrections.

“Our suggestion is to make sure all cash is deposited once it is received, and if you have to write a check out to the collection agency you will always have that trail,” Cork said.

After the meeting, Buckner said Prosecuting Attorney Scott Ash should clarify comments made to the Daily Telegraph on July 3 when Ash said an investigation was being launched to see if there was any “wrongdoing” by the fire board members.

“He’s made accusations of a misuse of funds or embezzlement without giving time to find out there wasn’t an embezzlement or missing funds,” Buckner said. “It’s a shame.”

When contacted Tuesday, Ash said he couldn’t immediately comment on the fire board situation. However, Ash said he should be able to make a statement in a couple of days.

Short said the fire board strives to serve the public, and hasn’t had a rate increase in 23 years. She asked the Daily Telegraph if the newspaper could name another such agency that hasn’t had a rate increase in 23 years.

— Contact Charles Owens at cowens@bdtonline.com