Another Volunteer Fire Department Victimized By Insider Theft
In what can only be described as an epidemic, yet another volunteer fire company has been victimized by a trusted insider who steals large sums of money.
The former treasurer of the Steelton Volunteer Fire Company, in Steelton, Pennsylvania, is accused of stealing $55,000 over the past three years. This is the 53rd case in my nationwide database where a volunteer fire department official (usually a treasurer, president, or chief), has taken fire company funds since 2008.
As unsettling as the numbers may be, the reality is that many more cases are going upreported by fire departments that do not want the publicity that accompanies the arrest of a high ranking official.
Here a link to the last case. I would be remiss to leave the impression that such theft is limited to the volunteer fire service. There have also been a number of firefighter unions that have been ripped off by their officials. One distinction – the union theft cases usually involve smaller sums of money.
Fundamentally, the problem is one of human nature: some people are very trusting of others, particularly their co-workers – and that includes most firefighters. Other people can’t seem to recognize the difference between someone else’s property and their own. Such thieves are the minority in the fire service – but without proper controls in our organizations, the trusting nature of firefighters makes us easy pray. All organizations (volunteer and career) need to have financial checks and balances, as well as routine audits.
Everyone Volunteer organization need a financial control, prefereable every month, this cut theft possibilities
what is suggested as the most effective means to preempt something like this?
Robert
First of all, we are too trusting. Secondly we do not want to offend one another by putting various protections in place that imply “we do not trust you”. Third we all have enough to do, and don’t want to make things any harder for each other. Those three factors combine to create the problem.
The solution is to implement sound accounting practices. First of all, financials should be audited by outside professionals periodically (every 2-3 years max but ideally every year). They should also be audited by insiders even more frequently.
Every expense should be scrutinized and full documentation required. Checks over a certain dollar amount should require 2 signatures. Company officials must not take shortcuts out of convenience. One such shortcut I have seen is “pre-signing” checks (eg. the president pre-signs 5 to 10 checks so the treasurer can pay bills).
While many organizations go through the company financials at their monthly meetings, a sharp thief can find ways to cover his/her tracks – and most people in the meeting are not focused on the details of what is being reported. Best bet is to have an audit committee that reviews the monthly treasurer’s report prior to the meeting and issue’s its report on the treasurer’s report.
A professional auditor can help the fire company put specific protections in place beyond what I have outlined. Note that everything I have just said means MORE WORK. It is also laborious and boring work. Thankless work. That is part of the problem.