Report No. 2007-20

April 2007

The following findings were included in our audit report on the Ebenezer Fire Protection District.

Ebenezer Fire Protection District funds have been misappropriated and misused.  The Board of Directors have made questionable decisions and have not provided the guidance and controls necessary to properly account for all district funds.

A 10-year employment contract for the former Fire Chief was approved on April 11, 2002. This original contract included a retroactive salary payment dating back to January 1, 2002 for $9,600 that appears to violate the Missouri Constitution.  Additionally, the check cleared the district's bank account two days prior to the Board's approval of the contract.  Because of concerns of nepotism with the 2002 contract, the Board subsequently approved and signed another contract on June 24, 2003.  However, one board member had not taken his oath of office, as a result, on August 5, 2003 the Board finally approved and signed the final 10-year contract.  In March 2006 the Board terminated the employment contract with the former Fire Chief paying him $28,500.

The former Fire Chief's employment contract included unreasonable and excessive terms such as ten percent raises annually for the first five years, an unspecified gas allowance, and a 90 percent buyout clause if the contract was terminated for reasons other than those specified in the contract.    Additionally, prior to terminating the contract in March 2006, the district paid the former Fire Chief $1,597 for two weeks vacation leave; however, leave records had not been maintained.  The former Fire Chief also maintained living quarters in one of the fire stations.  As a result, it appears some of the former Fire Chief's personal expenses were paid with district funds between January 2003 and February 2006 including satellite TV and extra receiver ($3,600), newspaper subscriptions ($440), and Internet service ($830).

The Capital One credit card issued to the former Fire Chief included numerous questionable charges totaling approximately $4,025 including: household and personal items ($1,135), a home theatre system ($515), and fireworks ($325).  In addition, late fees ($180), finance charges ($87), and over limit fees ($58) were paid by the district.  Itemized receipts were not available for charges totaling approximately $1,660.

Between January 2004 and February 2006 approximately $16,115 was charged to a discount store credit card account and paid by the district.  Approximately $13,565 was charged to the card issued to the former Fire Chief, of which at least $8,300 appears to be questionable, according to district officials.  Additionally, during this same time period, approximately $21,000 was charged to the district's home improvement store credit card,

of which at least $5,400 appears to be for questionable purchases.

A $2,000 cash donation was received, but not deposited into the district's bank account, and there is no documentation to indicate the disposition of these funds.   Additionally, four deposits into the district's account between January 2004 and December 2005 totaling approximately $3,000 were labeled as vending revenue on deposit slips; however, information from the district's bank indicates checks for donations and other revenue were actually deposited into the district's account.  Because adequate records were not maintained of cash received from the vending machine and information recorded on deposit slips is unreliable, it is not clear how much revenue was received and should have been deposited into the district's bank account. 

At least $6,988 in district funds appears to have been spent on repairs and tires for personal vehicles owned by the former Fire Chief and the former District Engineer, and on automotive parts that district personnel indicate would not fit any vehicle owned by the district.

Between January 2003 and February 2006, the district spent approximately $7,000, for cellular phone services.  Our review of phone bills identified numerous calls that appear to be personal, as well as equipment charges ($800), plan overage charges ($260), and ring tone charges ($75).  Although the district canceled all cellular phone contracts in March 2006, the equipment has not been returned to the district. 

The District Engineer was paid a total of $57,800 between July 2003 and July 2005, when he terminated employment with the district.  Numerous payroll transactions involving the former District Engineer appear questionable.  Additionally, documentation was not maintained to support $18,000 paid to fire district personnel for attending training and responding to emergency calls, including $2,800 paid to some personnel in advance.

Between January 2004 and March 2006 the district paid more than $38,000 for fuel.  The Board allowed officers to put up to $75 per month in fuel in their personal vehicles and charge it to the district.  There is no evidence that Board Members monitored the amount of fuel put into the district-owned vehicles, or the amount of fuel put in the officers' personal vehicles.  In March 2006 the district discontinued this practice and the average fuel costs paid by the district decreased from approximately $1,400 to approximately $600 per month.

The district does not have a formal bidding policy, and documentation of bids was not maintained for many of the district's larger purchases including, construction of a new fire station ($135,000), thermal imaging camera and a gas detector ($14,500), insurance ($21,800) and vehicle repairs ($2,900).  Additionally, supporting documentation was not retained for some disbursements.

Accounting duties are not adequately segregated, check issuing controls need improvements, receipt slips are not issued for monies collected, deposits are not made frequently enough and bank reconciliations are not always performed.  In addition, the board did not adequately monitor the district's financial condition and budgeting procedures were not in accordance with state law.

Also included in the report are recommendations related to district policies and procedures, board  meeting minutes, and capital assets.

Complete Audit Report