Audit alleges $120,000 misappropriated at Mid Sussex Rescue Squad

Tom Wagner

Tom Wagner

DOVER — Nearly $120,000 was misappropriated by the Mid Sussex Rescue Squad Inc., from 2011 to 2016, much of it by a former treasurer, a state auditor’s report determined.

According to Auditor of Accounts R. Thomas Wagner Jr. in a 12-page release Wednesday:

• The former Treasurer or the Squad initiated a total of $112,645 unauthorized cash withdrawal transactions from the Squad’s bank accounts.

• One check in the amount of $5,000 was payable to and authorized by the former Treasurer.

• Debit card transactions, totaling $1,833, were applied to the personal utility accounts of the Squad’s President and former Treasurer who were married at the time.

• One unauthorized payment of $399 was applied to a personal auto loan account in the President’s name.

The former treasurer repaid $109,630 to the Millsboro-based squad before the auditor’s investigation began, Mr. Wagner said.

No individual names were disclosed in the report. An attempt to reach Mr. Wagner for further comment was not immediately successful.

Evaluating the Squad, Mr. Wagner determined, “Throughout our investigation it became apparent that the Squad is an organization that lacks policies and procedures, segregation of duties, and financial oversight, which is compounded by the Squad’s small size.

“Although the organization serves a vital purpose for the community, the Board of Directors relies on those close family and personal relationships to manage the entity.”

In a response letter on March 16, Mid Sussex Rescue Squad counsel Bruce A. Rogers, expressed the squad’s concern that a “non-carefully worded report would undermine public (confidence) in this very important safety entity. …

“I close by reminding you that the Squad entered into a confidentiality agreement with the former treasurer wherein the Squad is prohibited from disclosing facts and circumstances surrounding the settlement with the treasurer.

“This agreement does not prevent the Squad from cooperating with the authorities should a criminal referral occur. We simply request any disclosures made in the report do not violate the settlement agreement, thus exposing the Squad to additional liability.”

The squad explained that it hired a former Office of the Auditor Accounts employee five months prior to the state audit to perform an internal review. The matter was also self-reported to the Delaware State Fire Prevention Commission, according to counsel.

“Simultaneously, the Squad took steps to recover the misappropriated funds from the member of the Squad responsible for the theft,” the letter stated.

The Squad detailed a $399 expenditure authorized by the Board of Directors in 2011 to cover a personal motor vehicle payment “of the soon-to-be-former spouse of the Squad treasurer.

“At this time, the parties were divorcing. …”

When monthly payments were supposedly not made by the treasurer, the Squad explained, the member’s vehicle would not start after being deactivated by the lender.

“Needing to get to and from work and home, the Squad member polled the Board who authorized a one-time payment to get the vehicle operational again. This emergency payment was based upon the Squad member’s long time service to the squad and the ability to secure the repayment if necessary.”

The Squad said “It is believed the Squad Member has ‘worked off’ the debt he has for the one time car payment” and noted his previous lack of reimbursement for a $20 hourly program for volunteer ambulance drivers.

“While there are no notes ratifying this procedure, it is reflected in the payment registers that this Squad Member was not paid,” the Squad’s letter said.

An official volunteer driver reimbursement program was approved at a Board of Directors meeting on March 10, according to the Squad.

Also, according to the letter, “The Squad carefully evaluated the options of either reporting the theft and likely never recovering the public’s money, or deferring prosecution and obtaining repayment of the stolen funds from the wrongdoer immediately.

“Looking at other fire companies and school districts which have suffered similar (and even larger) losses without ever receiving restitution, the Squad entered into an agreement with the former treasurer to receive repayment of the sums.”

The Squad said it has complied with all recommendations and suggestions offered by the state auditor.

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