By Brooke Springer
Staff Writer
August 29, 2006
STAMFORD -- A Board of Finance committee yesterday authorized a full forensic audit of the Glenbrook Volunteer Fire Department after auditors found too many "red flags" to ignore a possible misuse of funds.
An anonymous phone call to city officials a month ago sparked an initial investigation into the finances of the department -- one of Stamford's five independent fire stations, which are not operated by the city but do receive some city funding.
Last year, the New Hope Fire Company Inc., as the Glenbrook department is officially known, received about $1 million from the city.
Most of that money goes to salaries and benefits, Glenbrook Volunteer Fire Department President Edward Rondano said. About $150,000 is allocated to the department's operating budget; most of that is designated for specific uses, such as water and utilities, Rondano said.
"Personally, I don't think there's a lot of extra money to be misspent," Rondano, who is in his sixth year as the department's president, said in a phone interview yesterday.
In the first stages of the investigation, auditors found that records were not stored in a secure location, critical financial statements were missing, the department was two years late in getting its audited financial documents to the city, and no one had been balancing the books.
For example, one fundraising account hadn't been reconciled in years, Peter Privitera, the city's director of the Office of Policy and Management, told the finance board's Audit Committee yesterday.
There was no way to tell how much money had been raised or where it had been spent, he said.
Rondano said the fundraising account is used for purchases the city doesn't fund, such as a new TV for the firehouse's rumpus room.
"I don't believe that we misused funds at all," Rondano said. "As far as I know, we've been running the firehouse the same way as we've been running the firehouse for many years."
The auditors said the bookkeeping was so poor it was hard to tell whether documents had been removed or hidden on purpose, or whether the record-keeping had just been neglected. But there were enough accounting irregularities that city officials said they'd be remiss if they didn't order a full forensic investigation. Forensic audits provide an analysis that is suitable for use in a court, according to accounting Web sites.
"There are too many red flags not to do a full audit," Privitera said. "We're going to find out if maybe the old treasurer wasn't a good treasurer, but maybe a good fireman, or maybe there was a misuse of funds."
Former Treasurer David Judge, an electrical contractor, was replaced in June by David McMann, a retired attorney. Neither have any accounting experience, according to Rondano.
Judge said during his 10-year tenure as treasure he did "OK" and didn't see any problems with the bookkeeping.
"I'm not really familiar with anything that's going on," Judge said in a phone interview last night. "So I can't really comment."
When asked whether he was aware of any holes in the records, Judge said, "There was some reconciling that needed to be done that we were doing, but then I was voted out. But that was about it."
He said he was not aware of anyone in the department misusing funds.
Since auditors arrived, the department's financial records have been put under lock and key and accessible only to executive board members.
Finance board Audit Committee member Joseph Tarzia said he walked into the firehouse at 17 Arthur Place a month ago and saw papers strewn all over desks and said anyone could walk in and access them.
Tarzia said officials should have done something earlier to make sure the records were kept safe.
Since the audit began, the process for signing off on expenses has also been reigned in, Privitera said. The department has always required two signatures to cash checks, but in the past used signature stamps for convenience so one person could stamp both names. Now, actual signatures will be used.
The department also has notified its bank of the new authorized signatures.
"We didn't want the old treasurer to be the one authorized to sign the checks," Privitera said.
Audit Committee Chairman Timothy Abbazia said the lack of basic reporting controls at the Glenbrook firehouse raises a concern about all outside organizations that get city funds, especially the other four volunteer departments.
"At a minimum, I would like to see us show up at all the other fire departments and just see if they have all the proper documents," Abbazia said.
Privitera said the city will be instituting unannounced "spot" audits in the future but said he can only ask that outside agencies comply.
"I can assure you one thing, if there are firehouses out there whose finances are in disarray, they're scrambling to get them in order," he said.
The Board of Finance last month approved spending $18,000 for O'Connor Davies Munns & Dobbins LLP, an independent accounting and consulting firm, to conduct the audit. Yesterday the board approved an additional $7,000 to make the audit more comprehensive.
Copyright © 2006, Southern Connecticut Newspapers, Inc.