State Auditor: $191K missing from Millville Fire Co.

DOVER — An ex-treasurer allegedly made nearly $191,000 in personal transactions on the Millville Volunteer Company’s account, the State of Delaware Auditor’s office determined in a report released on Tuesday.

A lack of internal controls contributed heavily to the alleged theft, made up largely of ATM and cash withdrawals, according to the auditor; accounting records were also allegedly falsified to conceal the fraudulent transactions, investigation found.

“While fire companies in Delaware have proven their strong commitment to the safety and welfare of the communities they serve, their service does not mitigate their fiscal responsibility to taxpayers and donors,” the report stated.

Fire company officials contacted the auditor’s office to report their suspicion of alleged theft by the former treasurer, the report said. Officials said the former treasurer allegedly admitted to the personal transactions at a meeting in May 2015.

The name of the treasurer in question was not revealed in the report. The treasurer was removed from office on May 19, 2015, the auditor reported.

As the auditor’s investigation proceeded, no written policies or procedures regarding the handling of fire company finances was located other than position descriptions by-laws and a budget policy, according to officials.

“A common statement made during our interviews was that there was no clear definition of responsibilities or written job descriptions detailing the position duties and internal control procedures,” the report stated.

According to the auditor, $6,819.12 was allegedly spent on six auto and marine personal transactions, another $3,982.02 on nine retail purchases, and $7,250 on four family law attorney matters from Jan. 1, 2015 to June 30, 2015.

Purchases detailed

Among the alleged purchases were tires and rims from Sussex Automotive in Dagsboro and Trick Trucks in Millsboro, a truck lift kit and accessories from Trick Trucks, boat supplies from Bethany Auto Parts in Ocean View, a boat winterization from Bob’s Marine Service in Clarkesville and a boat slip rental from Vines Creek Marina and Tackle in Dagsboro.

Two Dodge Ram pickup trucks were referenced in the detailed purchases, along with a Toyota Solara and 21-foot Sea Pro boat.

“MVFC officials confirmed that they do not own these vehicles or boat,” the report stated.

Retail-wise, alleged purchases included a shotgun and rifle case, queen size bed, camo gloves, jacket, floating gun case, hunting or fishing boots, South Carolina sticker decals and a fundraiser auction purchase.

During the period reviewed, the report found that three fire company credit cards were open and active, and issued to three members including the treasurer.

“Until May 2015, credit card transactions were not presented to the members for approval at the bi-monthly company meetings,” the auditor said.

The auditor said it identified 67 ATM withdrawals totaling $38,880 from Dec. 9, 2013, to May 5, 2015.

Another 100 transactions totaling $45,474,01 could not be determined as fraudulent or company business, the auditor stated. Categories listed included alcohol, auto maintenance, gas, home improvement, restaurant and retail.

“Conversely, we were unable to obtain sufficient evidence to classify them as personal purchases as they were not definitively personal in nature,” the report concluded.

The auditor encouraged the fire company to “update their by-laws to indicate which positions should be authorized signers on bank accounts and to ensure position duties and responsibilities are properly outline and segregated.”

On Jan. 12, the auditor sent a letter to the State Fire Prevention Commission “strongly” advising “all fire companies to comply with Delaware Code and utilize a qualified certified public accounting firm.

“We would further advice that the certified public accounting firm has successfully passed peer review and should conduct the engagement in accordance with ‘Statements on Standards for Accounting and Review Services’ issued by the American Institute of Certified Public Accountants and Financial Accounting Standards Board standards as applicable.”

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